The credit experts at the Equifax Finance blog explain how credit information make its way into a credit report in the recent article, “How Do Credit Reporting Agencies Get Their Information?”

You know that your credit report contains a lot of the information that lenders need to make a decision about whether or not to lend you money (or extend you credit). You should not that your credit report isn’t the only thing that lenders use, but it is certainly one of the most important.

Your credit report includes information about your credit accounts from the type of account, the date it was opened, your credit limit or loan amount, your account balance, and payment history, identifying information and any public financial records (like foreclosures) under your name.

These details collectively provide lenders a snapshot of your financial and credit life in one helpful report. The details on each account is provided to credit reporting agencies by the companies that have extended you credit (and/or are currently extending you credit). There are three major credit reporting agencies – Equifax, Experian and TransUnion. When you get a loan from the bank, open a credit card, get a loan for a car, take out an Atlanta real estate mortgage, or otherwise take out credit, the companies with which you do that report information on you to the credit reporting agencies. They send credit reporting agencies information on your credit activity, like whether or not you pay your bills on time. Credit reporting agencies also get information from debt collection agencies and public records to include information on bankruptcies, tax liens, and judgments.

The information that is received by the credit reporting agencies makes up your credit score. Your credit score is a number that lenders use to assess your risk as a borrower. Negative information like late payments negatively impact your score while positive information like regular on-time payments positively impact your score.

Your credit report and score may be slightly different between each of the three credit reporting agencies. This is because not all lenders report to all three agencies (the agencies can only work with the information they have) and because each agency has its own model for calculating credit scores.

You should check your credit report regularly (at least once every four months or so, as you get one free report each year from each of the three major agencies). Check to make sure that everything in your report is accurate and up to date. Learn more about what to look for in credit reports in the full article on the Equifax Finance blog. When you are done, check out the many helpful personal finance articles there, which cover topics like credit, identity theft protection, taxes, savings and more.

Great information provided by the Atlanta Real Estate Forum