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    Credit Reports: What You Want to Know

    An important practice related to your overall financial health is to check your credit report annually.  You are responsible for verifying the information being reported is accurate.

    The Federal Trade Commission’s Fair Credit Reporting act requires each of the nationwide credit reporting companies — Equifax, Experian, and TransUnion — to provide you with a free copy of your credit report, at your request, once every 12 months. Larger creditors report to all three companies while smaller lenders and merchants may choose to report to only one credit reporting company.  Therefore, checking all three reports is very important.

    What’s the difference between the report and score? 

     
    Credit Report
    • Details information about your credit history
    • Creditors voluntarily provide this information and are not required to report to all three credit reporting agencies
    • The information in the report determines the score
    Credit Score
    • Your score is essentially a “grade” determined by your credit history
    • Scores range from  300 (the worst) to 850 (the best)
    • Your score determines your interest rate, because it gives lenders insight on your likelihood to repay them if they extend credit to you

     

    How to Improve Your Score

     

    What’s on the Report?

    • Your address and identifying information
    • Current and previous loans
    • Payment history
    • Public financial records such as judgements, collection accounts and bankruptcies

     

    Four major sections of the report:

    Identifying information
    •  your name and aliases
    • date of birth
    • social security number
    • employment data
    • Social Security number
    • current and previous address
    Tradelines:

    Current and previous lines of credit are listed with the following information about each account:

    • Account status:  Current/open, closed, charged-off (sent to collections)
    • Account balance
    • Credit limit
    • Account Responsibility : Joint or individual
    • Most recent payment
    Public Information:

    May include:

    • Bankruptcies
    • Foreclosures
    • tax liens
    • judgments
    • past due child support
    • wage garnishments
    Inquiries:

    Reveals who is making inquiries about your credit activity over the past two years. 

    • Hard Inquiries occur when applying for credit and usually impacts your credit score
    • Soft Inquiries do not impact your score and occur when your credit report is pulled for a reason other than a loan application (ex. your annual report,  creditors offering pre-approvals, employer inquiry)

     

    Take a Tour: See an Interactive Experian Credit Report 

    Tips


    1. Request a free credit report from each of the three credit reporting agencies to monitor your information. 
    2. Pull a report from one of the three bureaus every four months for timely account monitoring.
    3. Place a reminder on your calendar for what report you should pull next. All three agencies, Equifax, Experian and TransUnion, use the same free source www.AnnualCreditReport.com

    Things To Know

    • Checking your credit report will not negatively impact your score.
    • Your report only includes your account history and delinquencies.
    • You will not receive a score with your free credit report unless you choose to pay for the score and provide a method of payment. 

    How are credit reports used?

    • Your report provides insight into your financial history, your responsibility when taking on debt, and/or how you’ve managed obligations during various life stages
    • Lenders use your credit report information to review your loan and credit card payment information to predict your likelihood of loan repayment and combined with your score is used to determine your present qualifying interest rate.
    • Insurance companies use the information to help determine premiums.
    • Employers often utilize this information when making hiring decisions.

    Why should you check your credit report?

    • To verify that accurate information is being reported.
    • To insure no one is utilizing your name, social security number, or other information to commit fraud by opening accounts in your name. This could adversely impact your ability to get credit, insurance, or a job if not corrected.

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