What does a US credit report consist of?

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If you are moving or have just moved to the US, you might have read about US credit reports and their importance. In simple terms, it is a compilation of your credit accounts, payment history, and credit handling abilities over a period of time. Your credit report is generated based on these factors, and creditors refer to this when offering you a loan or extending your credit limit. Making payments on time will improve your US credit report to free credit reports from the US government. The credit bureau in the US keeps an eye on your transactions and if they are made on time.

What details does a US credit report cover?

1. Personal Details

The credit report in the US includes your details such as your address, name, social security number, and date of birth. The credit bureau keeps a record of all your details in the US.

This forms the most crucial part of your US credit report and includes your credit cards, bank accounts, student loans, mortgages, and more. The information tells you for how long you've had your credit cards, credit limit, account balance, and payment history. In this data, you may not find closed accounts, as they are removed from your credit report after some time.

3. Inquiry Details

Your credit report in the US may contain two categories of inquiries:

  • Soft inquiries - Soft inquiries (also known as soft pulls or soft credit checks) are usually made as part of background checks. A credit card issuer might make a soft inquiry to check if you're eligible for specific offers. Some employers might run a soft inquiry before hiring a candidate.

The vital thing to note is that soft inquiries won't affect your credit report in the US and are only visible when you view your credit report.

  • Hard inquiries - These are inquiries made by financial institutions to check your US credit report history. For example, when a bank checks your credit report to know your credit history, it's termed a hard inquiry.

Hard inquiries affect your credit score and reduce your chances of getting a loan and credit card.

4. Repayment History

Along with your account, your US credit report contains your repayment history. Too many late payments impact your credit score adversely. You get a free credit report from the US government if you make on-time payments.

What isn't found in your credit report?

  • Salary: No one can get to know your salary by looking at your credit report
  • Employment status: While your credit reports might list your employers, they don't reveal details such as how long you worked in a place or your current employment status
  • Marital status and spouse's credit history: If you get married, you and your spouse will have separate credit reports. But any account you open together — a mortgage or shared credit cards, for example — will show up on both credit reports, and mistakes such as late payments could affect both of you
  • Assets: Your bank balances, retirement accounts such as 401(k)s, and investments or brokerage accounts aren't listed on your credit reports
  • 401(k) loans: When you borrow money from your retirement savings account, it doesn't show on your credit report

Difference between a US credit report and a US credit score

It's important not to get confused between the two. A credit report is a list of all your financial transactions over a period of time. A credit score is derived from a credit report and tells prospective creditors how trustworthy you are.

Check your US credit reports regularly and look for discrepancies, if any. This is important as creditors will look at your credit report before giving you a loan or increasing your credit limit.