About Your Credit Report
A doctor and his wife had plenty of income and cash in the bank, but they didn't pay their bills — just about all their trade lines were delinquent. Their credit score was in the 500s. When the lender told the couple about their poor credit, they said it couldn't be true; all they were aware of was a cell phone dispute they were involved in. When the doctor and his wife looked at their credit report, they changed their tune.
David Boone says he hears often-repeated stories of denial. The first vice president of The Provident Bank in New Jersey says, “I don't know if people just don't know or if they lie when it comes to their credit. The most important thing that people can do in financing a home is to know their credit report.”
Your credit score is based on five categories: payment history, which is the most important part of your score (35 percent of your credit score); amounts owed (30 percent); length of credit history (15 percent); new credit (10 percent); and types of credit used (10 percent).
Your credit report includes the following information about you:
Identifying information: Your name, address, Social Security number, date of birth, and employment information are used to identify you. (This is not used in credit scoring.)
Trade lines: These are your credit accounts. Lenders report the type of account (auto loan, mortgage, bank card, department card, etc.), credit limit or loan amount, account balance, your payment history, and date the account was opened.
Credit inquiries: This is a list of everyone who pulled your credit report in the past two years. There are two types of inquiries listed: voluntary inquiries sparked by your request(s) for credit and involuntary inquiries, where lenders pulled your report to send you a preapproved credit offer in the mail.
Public record and collection items: This includes public information such as bankruptcies, foreclosures, liens, judgments, suits, and wage attachments. The credit reporting agencies gather data from collection agencies on overdue debt and public records from county and state courts.
Credit scores do not come with the credit reports — these have fees. Typically, lenders will purchase your score from Experian, Equifax, and Trans Union and then select the middle score. Some lenders will purchase one score and report. Contact the credit bureaus for your score (for a fee) or visit
