What is a Credit Report?

A credit report includes information on where you live, how you pay your bills, and whether you’ve been sued, arrested, or 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.

The Federal Trade Commission (FTC) works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. 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 FTC, the nation’s consumer protection agency, enforces the FCRA with respect to consumer reporting companies.

A credit score is a number based on all the information in a credit report. This information is converted into a number that the lender uses to determine whether a borrower is likely to repay a loan in a timely manner. Generally, the higher the score, the less risk the person represents.