Credit Reports

What Your Credit Report Shows

Your credit report can tell you a lot. It will show all open lines of credit available to you, their limits, and the length of time you have had each line. (These lines include your credit cards.) All of your outstanding balances on these lines will show too.

Most important, your credit report shows your payment history. It literally shows each payment you have or have not made on each line of credit.

From your credit reports, lenders can also determine your debt to income ratio. This ratio is important in helping a lender decide whether or not you qualify for a loan and if you do, what interest rate and credit limit you qualify for.

Beyond finances, your credit report can affect other aspects of your life. Most employers will look at your credit report as part of the hiring process and background check.

How Long Items Stay on Your Report

The length of time that items show on your credit report varies according to the type of history.

• Forever:
  Good credit history will stay on your report forever.
  If you do not pay your taxes, federal student loans, or if you have another government lien against you, it will stay on your report forever.
• 10 Years:
  If you file for bankruptcy or have a civil judgment against you, it will show on your report for 10 years.
• 7 Years:
  If you make late payments or get sent to collections, these will continue to show on your report for 7 years or more. Even after they no longer show on your report, your credit score still suffers their impact.

Remember that no matter how long an item shows on your report, it affects your credit score forever. The best thing to do is to keep your balances low and make on time payments so that you don’t have to worry about it.

Getting Your Credit Report for Free

Each year, you are entitled to 1 free credit report from each of the 3 credit bureaus (Equifax, TransUnion and Experian). To get these free reports, visit www.annualcreditreport.com. It is a good idea to access only one report at a time, spacing them throughout the year. This way, you can monitor your credit report for free. This is helpful in preventing identity theft.