Get Answers to your

Credit Questions

Many homebuyers worry about how their credit history will affect their ability to buy a home. Most people will not need to worry about the effects of their credit history during the mortgage process.

However, if you have had credit problems, be prepared to discuss them honestly with a mortgage professional and come to your application meeting with a written explanation. Responsible mortgage professionals know there can be legitimate reasons for credit problems, such as unemployment, illness or other financial difficulties.

What Is A Credit Bureau?
The Three Consumer Credit Bureaus?
What Exactly Is A Credit Report?
What Information Does A Credit Report Contain?

What Is A Credit Bureau?

A credit bureau or credit reporting agency is in the business of gathering, maintaining, and selling information about consumers' credit histories. It collects information about consumers' payment habits from credit grantors like banks, savings and loans, credit unions, finance companies, and retailers. The credit bureau stores this information in a computer database and sells it to credit grantors in the form of credit reports.

Although credit-reporting agencies provide your credit report to lenders when you apply for credit, they do not make actual lending decisions. It is up to the lender to evaluate your credit report and any other factors they consider important and then decide whether or not to offer you credit.

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The Three Consumer Credit Bureaus?

There are three major credit bureaus that provide nationwide coverage of consumer credit information in the United States: Equifax, Experian, and Trans Union. You can contact them at the addresses below.

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What Exactly Is A Credit Report?

A consumer credit report is a document that contains a factual record of an individual's credit payment history. Credit grantors are permitted by law to review your credit report to objectively determine whether to grant you credit. As people pay their bills, most lenders report credit payment information to credit bureaus. So most of the information in your consumer credit report comes directly from the companies you do business with.

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What Information Does A Credit Report Contain?

A consumer credit report contains four types of information: identifying information, credit information, public record information, and inquiries.

Identifying information includes:

• Your name.

• Your current and previous addresses.

• Your Social Security number.

• Your year of birth.

• Your current and previous employers.

• If you're married, your spouse's name.

Credit information includes credit accounts or loans you have with:

• Banks.

• Retailers.

• Credit card issuers.

• Other lenders.

Most information, whether positive or negative, remains on your credit report for 7 years from the date it is first reported, and then cycles off automatically. If there is inaccurate information in your credit report, you have the right to dispute it and have it removed.

Public record information includes any information that's contained in state and county court records, like:

• Bankruptcies.

• Tax liens.

• Monetary judgments.

Bankruptcies can remain on your credit report for up to 10 years. Other public record information can remain for up to 7 years.

Inquiries indicate to other credit grantors that you have applied for new credit that could result in additional debt. Potential lenders view multiple recent inquiries on your credit report as a sign that you are overextending yourself. Most inquiries stay on your credit report for up to two years.

(A credit risk score may also be included when your report is provided to a credit grantor, although it is not included on consumer review reports. The ways to calculate and use a credit score vary widely, so a score has little meaning outside of the context of a particular lender's unique guidelines for use. Therefore, it is not included on consumer review reports.)

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The Three Consumer Credit Bureaus

Equifax
PO Box 105873
Atlanta, GA 30348
(800) 685-1111

Experian
(Formerly TRW)
PO Box 2002
Allen, TX 75013
888 EXPERIAN (888 397 3742)

Trans-Union
PO Box 390
Springfield, PA 19064
(800) 916-8800
(800) 851-2674

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