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Credit Report Basics
Every time you make a credit transaction, you leave a trail of information that gets picked up by credit agencies and forms what we call the credit report. Relax, this is not a sinister spying operation by some Big Brother-type institutional monster that is out to get you. Your credit report is used by lenders to determine your ability and willingness in paying debts. It becomes a basis for their decision whether to grant you a loan and at what interest rate.
So what goes into your credit report? Of course, it contains basic details to identify you such as your name, address, date of birth, Social Security number, and employment information. Your credit report also lists all your credit accounts including your mortgage, credit cards, and loans as well as the credit limit, loan amount, and your payment history.
Also reflected on your credit report is a list of everyone who made an inquiry on your credit history. Hard inquiries are those from credit card companies and loan agencies. This type of inquiries has an effect on your credit score. Soft inquiries on the other hand are those made by your employer or your own requests. They do not affect your standing as a borrower.
Your credit report also contains other public information about you such as bankruptcy, monetary judgments, suits, and foreclosures. Negative details will certainly hurt your credit scores but they are deleted after a certain period. Notice of bankruptcy is removed after ten years while debts are deleted after seven years.