A credit report contains an individual's personal and financial information used by lenders to assess credit risk. It includes sections for personal details, credit history of open and closed accounts, credit inquiries, public records like bankruptcies, and a summary. Credit reports are prepared by the three major credit bureaus - Equifax, Experian, and TransUnion - and detail an individual's addresses, SSN, accounts, payment history, inquiries, and more to evaluate their creditworthiness.

1. D E C O D I N G A C R E D I T
R E P O R T

2. C R E D I T R E P O R T
A credit report is a document that includes all the details of historical and present credit information of an
individual. Credit reports contain personal information such as current and previous address, SSN number,
DOB, credit details such as loan account no, monthly instalment, balance of loan, payment term etc.

3. W H A T I S P U R P O S E O F C R E D I T R E P O R T S
• Bankers use credit reports to assess the creditworthiness of the borrower. Credit reports help to evaluate
the lending risk based on credit score and credit history.
• Bankers in United States rely on reports prepared by three major credit reporting agencies: Equifax,
Experian and TransUnion to assess credit risk.

4. S E C T I O N S I N C R E D I T R E P O R T
A credit report is divided into five Sections.
1) Personal Information
2) Credit History
3) Credit Inquiries
4) Public Records.
5) Credit Summary

5. 1) PERSONAL INFORMATION:
• A credit report contains information about an individual’s Social Security Number (SSN), marital status,
DOB, number of dependents, current and previous address of an individual, FICO score based on all three
major credit reporting agencies.

6. 2) CREDIT HISTROY:
The second section of credit reports gives us information about open, closed, derogatory and disputed credit
accounts such as instalment loans (auto loans, mortgage loans) and revolving credit (credit cards, line of credit).
Credit history also includes information about lender, loan account number, owner of account such as joint or
individual, account opened date, limit of account or original amount of loan, current balance of loan, monthly
instalment amount, term of loan, payment dues in last 30, 60 or 90 days, status of account such as paid or pays as
agreed, type of loan such as auto loan, mortgage loan, education loan, card etc. and vendor or source of
information ( Equifax, Experian and TransUnion ).

7. An example of Open account as below:

8. An example of Closed account as below:

9. An example of Derogatory account as below

10. An example of Disputed account:

11. 3) CREDIT INQUIRIES:
A lender investigates the credit report before lending money in order to check credit worthiness. That inquiry
gets noted as part of borrower credit history.
There are two type of credit inquiry: Hard Inquiry and Soft Inquiry
Hard Inquiry: - An inquiry related to new lending/money is called hard inquiry. Hard inquiries can be harmful to a
borrower’s credit score as each hard query impact individual credit score. Hard inquiry remain on one’s credit
report for two years.
Soft Inquiry: - An inquiry which doesn’t impact individual credit score is called soft inquiry. Soft inquiry can be
used by an individual to check their own credit score. Like hard inquiry, soft inquiry also remains on one’s credit
report for two years.

12. An example of Credit Inquiries as below:

13. 4) PUBLIC RECORD:
Information which is not private or can be published for ordinary people is called a public record. Any record
related to bankruptcies, tax liens, lawsuit judgement, delinquency also appears in the credit report’s public
record section. These public records can negatively impact the credit score of an individual. As public records
get older, it has less negative impact on credit score.
An example of Public Records as below:

14. 5) CREDIT SUMMARY:
The last section of the credit report is a summary of credit. Brief summary of the different account types,
monthly payment, balances, limits, past dues in last 30,60 or 90 days is included in this section. The Credit
Summary also summarizes the number of worst trades, inquiries, bankruptcies and oldest trade date.
An example of Credit Summary as below: