Financial Education Clearinghouse

Credit Reports and Scores

Credit History

Understanding what's on your credit report and how you are scored by lenders can help you obtain better interest rates when applying for loans.

Credit Reports

Credit reports contain information about your background and credit history. Lenders look at these reports to determine your credit worthiness.

Credit reports include information on where you live, how you pay your bills, and whether you’ve been sued or arrested, or have filed for bankruptcy. Nationwide consumer reporting companies sell the information in your report to creditors, insurers, employers, and other businesses that use it to evaluate your applications for credit, insurance, employment, or renting a home.

Obtaining Your Free Credit Report

The Fair Credit Reporting Act (FCRA) requires each of the nationwide consumer reporting companies — Equifax, Experian, and TransUnion — to provide you with a free copy of your credit report, at your request, once every 12 months. The FCRA promotes the accuracy and privacy of information in the files of the nation’s consumer reporting companies. The Federal Trade Commission (FTC), the nation’s consumer protection agency, enforces the FCRA with respect to consumer reporting companies.

You can obtain you free credit report at www.annualcreditreport.com.

Credit Scores

You are also assigned a credit score, which is based on the information in your credit report.

Your credit score helps a lender determine your credit worthiness and what kind of interest rate they will offer you.

If you have a good credit history and have established that you are able to pay your bills on time, your score should be high and will allow you get loans with a good interest rate.

A poor credit score may result in a lower credit limit or higher interest rate.

There are several credit scores out there. FICO and Vantage are the most commonly used.

For more information, visit www.fico.com and www.vantagescore.com.