Credit Sesame Wonder how your credit report is created? Sometimes it's best not to know how the sausage is made, but in this case some extra knowledge may be enlightening.
John Ulzheimer, a credit expert, worked with the Web site Credit Sesame to create a graphic map showing how various types of information make their way - or not - into your credit report.
In most cases, Mr. Ulzheimer said, the credit bureaus - like Equifax, Experian and Transunion - receive information from institutions where you have accounts, like credit card issuers or home loans or student loan lenders. In industry lingo, these are known as “trade†or “tradeline†accounts, he said.
Those accounts make up the bulk of the information in your credit report. Institutions provide the data under agreement with the bureaus, in exchange for access to credit files so they can evaluate the creditworthiness of applicants. Institutions aren't legally required to report credit information - but if they don't, they lose the benefit of having access to credit reports.
When credit bureaus get customer data, he said, they generally audit it before posting it to your credit file, to help avoid errors and disputes. A batch of data with an unusually high proportion of delinquencies, for instance, might be sent back for double-checking.
When lenders seek your credit report in response to an application for a credit card or a loan, it shows up as a “hard†inquiry. Too many such inquiries may cause your credit score, which is based on information in your credit report, to dip.
Some inquiries don't affect your score, however. They include requests made as a result of applying for insurance or for service from a utility company, Mr. Ulzheimer said, and requests you make yourself for a copy of your credit report.
Some public records, like bankruptcy filings or federal tax liens, usually appear on your credit reports because the credit bureaus have electronic access to federal courts through the Pacer document system. But civil judgments filed with state and county courts may or may not show up on your report, since not all of those courts make such information available electronically. Credit bureaus may be able to find the information through database services, but its appearance in credit files is generally less consistent than legal information generated by federal courts. (In other words, you may get lucky.)
Have you ever had a legal judgment appear on your credit report? What impact did it have?
