Where Does Credit Report Information Come From?

If you were wondering where the information on your credit report comes from, you’ve come to the right place as we will discuss where credit report information comes from in much detail below.

Where Does Credit Report Information Come From?

The information on your credit report is furnished to the credit reporting bureaus (Experian, Transunion, and Equifax) by creditors and lenders, such as banks, credit card issuers, home loan lenders, and auto finance companies. Other information is added from public records, such as court records and property records. Each one of the credit bureaus gets information from different sources, so the information on your credit reports can vary from one report to another report.

Your credit report contains a summary of how you’ve handled using credit cards, auto loans, student loans, personal loans, and other debt accounts in the past. Credit reports are used by creditors and lenders to assess your creditworthiness when determining whether to lend you money and on what terms. For this reason, it is extremely important that you repay the money you’ve borrowed on time.

On-time repayment and responsible borrowing ensure that the information reflected in your credit report is positive. If you fail to repay the money that you’ve borrowed on time, negative information will appear on your credit report, making it difficult to qualify for credit in the future.

It’s important to note that the information in each of your credit reports from Experian, Transunion, and Equifax can contain different information because creditors and lenders may not furnish (provide) your account information to all three credit reporting bureaus.

For example, if you have an auto loan, your lender may choose to only report your account status to Experian and Transunion. Therefore, your account status will only appear on your Experian and Transunion credit reports without appearing on your Equifax credit report.

What Information is Furnished to the Credit Reporting Bureaus?

Here is a list of information that is typically provided by your lenders and creditors to the credit reporting bureaus:

  1. Your personal information
    • Name
    • Date of Birth
    • Address
    • Social Security Number
  2. The date you opened your account
  3. The balance on your account
  4. Your payment history
  5. Missed payments (if any)
  6. Derogatory marks associated with the account
  7. Employment Information

Your FICO credit score is calculated based on the information contained on your credit report. The more positive your payment history, the lower the balances on your accounts, the more diverse your accounts, and the older your accounts, the better your credit score will be.

Note: Your personal information is only used to identify you as the account owner. Your personal information has no bearing on your credit score.

Accounts in Good Standing

Ideally, you should aim to keep all of your accounts in good standing, meaning you’ve made all of your payments on time, as originally agreed upon between you and your lender. Accounts that are in good standing boost your credit score because they contain positive payment history. Your payment history accounts for 35% of your credit score. So, make sure to make all of your payments on time for the best impact on your credit score.

Accounts Not in Good Standing

If you’ve missed payments on your account, your account may reflect late payments. Accounts that have missed payments reported can lower your credit score as the late payment appears on your credit report. A single late payment can lower your credit score by up to 100 points. So, make sure to make all of your payments to avoid a hit on your credit score.

What Type of Information Appears On Your Credit Report?

Your credit report typically contains the following type of information:

1. Credit Card Account Information

If you have a credit card, your account status will likely be reported to all three major credit bureaus. The information reported will include your personal information, the balance on your credit card, your payment history, and any derogatory marks, such as missed payments.

2. Personal Loans

Personal loans are also reported on your credit report. The original amount of the loan is reported along with your payment history. Your credit report will also include the current balance on your account. If you’ve missed any payments, late payments will also be reported to the credit bureaus and will appear on your credit report.

3. Auto Finance Loans

If you’ve financed a vehicle, an installment account will appear on your credit report, providing the date you opened your finance account, the original amount of money borrowed to buy a car, your current account balance, and your payment history. This information is furnished to the credit bureaus to inform lenders how you’re handling repaying the money you borrowed to buy a vehicle. Also, if you’ve missed any payments or had the car repossessed, all of this information is provided on your credit report.

4. Inquiry Information

Every time you apply for a credit card or a loan, a hard inquiry is placed on your credit report, alerting lenders that you’ve been seeking to borrow money. A single hard inquiry will only slightly lower your credit score by a few points. However, submitting too many credit card or loan applications within a short period of time will cause a large number of hard inquiries to appear on your credit report. Although a single hard inquiry will lower your credit score by a few points, if you accumulate too many within a short period of time, you will significantly lower your credit score. That said, a hard inquiry only remains on your credit report for 2 years from the date that it was added. After the 2 year period, it will automatically be removed from your credit report.

5. Collection Accounts

If you fail to repay your debts on time, your debt may be sold to a collection agency. A collection agency will then likely add a collection account to your credit report. A single collection account appearing on your credit report can lower your credit score by 100 or more points. Paying off a collection account will not remove it from your credit report. Once a collection account appears on your credit report, it will remain on there for 7 years from the date your first missed a payment on the account. After the 7 year period, the collection account will automatically be removed from your credit report. As the collection account ages, its impact on your credit score will lessen until it’s ultimately removed from your credit report.

6. Bankruptcies

If you file for bankruptcy, bankruptcy will appear on your credit report. The date of the bankruptcy, type of bankruptcy, and any related public information will appear on your credit report. Bankruptcy is among the most negative marks that can appear on your credit score. It can lower your credit score by up to 200 points. Chapter 7 bankruptcy will remain on your credit report for 10 years from the date you filed for bankruptcy, and Chapter 13 bankruptcy will remain on your credit report for 7 years from the date you filed for bankruptcy. The impact bankruptcy has on your credit report will lessen as the bankruptcy ages and is eventually removed from your credit report.

The Bottom Line

So, now you know that the information on your credit report comes from creditors and lenders furnishing (providing) the information to the credit bureaus. The credit bureaus then add the information to your credit report. The information in your credit report is then used to calculate a credit score for you. If you have any general questions or comments, please feel free to leave them in the comments section below.