Credit relationships exist primarily among the user of credit, the lenders, and the providers of goods and services who accept credit for payment.

There are other key players in the world of credit — consumer reporting agenciesCRAs are credit bureaus that collect and sell information about consumers to creditors, employers, and businesses. They are regulated by the Fair Credit Reporting Act (FCRA) and also by state laws. The three major CRAs are Experian, Equifax, and Trans Union. (CRAs) — that are in the business of gathering and selling your personal credit information in the form of a credit reportInformation gathered from businesses and companies with which a person has a financial/business relationship (present or past). These could include department stores, banks, credit card issuers, and mortgage companies. Information on tax liens, bankruptcies, and lawsuits comes from court records. One free annual report can be ordered once every 12 months from each of the three major consumer-reporting agencies. . With your credit history in hand, a bank, credit card company, mortgage lender, landlord, or even a potential employer has a wealth of information that can affect your present and future financial life.

What is a Credit Report?

A credit report is a record of all of your credit activities over a number of years. It lists credit card accounts and loans that are open, the balances, and how promptly payments are made. This report also shows any actions taken because of unpaid bills (e.g., the closing of an account, accounts transferred to a collection agency, legal actions, etc.).

Credit reports list identifying information such as known addresses, other names (aliases) used, birth date, Social Security number, name of spouse (if applicable), and names of employers. Companies/businesses that have requested copies of the credit report within the past 12 months are also listed.

More Consumer Credit
Reporting Basics

Experian, one of the three major U.S. credit reporting agencies, has additional information on the basics of credit reporting available on their website. You can even download a sample credit report that explains how to read it.

Thumbnail of a Credit Report

Credit reports also list information from public records, including state or federal tax liens, court records on bankruptcy proceedings, or financial judgments. Generally, all credit history information, good or bad, remains on a report for seven years. A personal bankruptcy can remain on a credit report for ten years.

In the United States, the information in your credit report is maintained and updated by consumer reporting agencies (CRAs), private businesses that obtain your credit information. The three major U.S. agencies that operate credit-reporting businesses are Experian, Equifax, and TransUnion. CRAs are also commonly known as credit bureaus.

An important financial management skill is knowing how to handle credit and not blemishing your credit record. A good report reflects a history of responsible credit use. Good credit is a financial tool for you to create future wealth. It is your financial responsibility to maintain a good credit ratingA formal evaluation of an individual’s or business’ credit history and capability of repaying obligations by a credit reporting agency. The credit rating is based on the number of outstanding debts and whether debts are being repaid in a timely manner. and ensure that personal credit report information is accurate.

Who Uses Your Credit Report Information?

Banks, credit card companies, and other lenders purchase credit information to determine your creditworthiness. With a poor credit report you cannot obtain credit (loans) at the price you want or sometimes any credit at all.

Prospective employers and landlords also seek credit information in order to determine your reliability. Your current employer might be concerned with the amount of credit card debt, the slowness in paying an auto loan or an account turned over to a collection agency. Both employers and landlords require written consent to aquire your credit report.

Check Your Credit
Report Annually

CRAs are required to provide you with a free copy of your credit report every 12 months. Reports can be ordered by calling 1-877-322-8228, online at*, or by completing the Annual Credit Report Request Form and mailing it to:
Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.

Note: is the only official and only free website to use, set up by the three credit bureaus. All other sites advertised are not official or fee free.

Consumer Protection

Because credit is so important, the federal government has created several laws to protect consumers. These laws regulate how credit history is maintained and how it can used.

The Equal Credit Opportunity ActThe ECOA is a federal law that protects consumers from being refused for credit for any reason other than inability to repay. The ECOA also provides guidelines that credit bureaus must follow and promotes accuracy, privacy of information, and fairness in reporting. The law is summarized on the Federal Trade Commission website at (ECOA) prohibits a creditorThe lender or supplier of money, goods, services, or securities; A person or organization which extends credit or lends money to others. from considering sex, race, marital status, religion, or national origin, when deciding whether or not to give credit. A creditor, under this law, must also evaluate public assistance in the same way as other income.

The Federal Fair Credit Reporting Act (FCRA) is a federal law that protects consumers by governing how consumer reporting agencies (CRAs) — usually referred to as credit bureaus — operate. The FCRA law requires that each of three nationwide CRAs provide every consumer with a free copy of his or her credit report, upon request, once every 12 months.

Some of the other rights that protect consumers under FCRA law are:

  • Consumers are protected under the FCRA with regard to accuracy, fairness, and privacy of information. However, it is the consumer who has the responsibility to correct inaccurate information by contacting CRAs.
  • Consumers have the right to know what is in their credit report file.
  • Consumers must be told if information in the credit report has been used against them (i.e., a person denied a credit card will receive a letter stating why and where this information was obtained). Letters denying credit will include the name of the CRA (Experian, Equifax, or TransUnion) that supplied the information.

For additional information on government protections for consumers see the federal Consumer Financial Protection Bureau website at

Fixing Inaccuracies

Inaccurate information can be disputed with the CRA. The law provides that the CRA must investigate such claims in a timely manner (usually within 30 days). When information is found to be inaccurate, the CRA is required to correct or delete it. For information on how to dispute inaccuracies see Improving Your Credit Score in the Credit Scores section.

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