Credit Profiles
A credit profile is the record that national credit reporting companies maintain about a consumer's borrowing and repayment history. It is used by lenders, landlords, and others to evaluate applications.
What a Credit Profile Is
A credit profile, also called a credit file, is a record of a consumer's credit history maintained by national credit reporting companies. These companies are private entities that collect and organize information from creditors, lenders, and other data furnishers.
The profile includes identifying details, credit accounts, payment history, public records, and inquiries. It is not a single document but a continuously updated record that changes as new information is reported.
While the terms credit profile and credit report are often used interchangeably, a credit report is typically a snapshot of the profile at a specific point in time. The profile itself is the underlying database maintained by the company.
What Information Appears in a Credit Profile
Identifying information includes a consumer's name, current and previous addresses, Social Security number, date of birth, and employment history. This information is used to match incoming data to the correct file.
Credit account information covers revolving accounts (such as credit cards), installment loans (such as auto loans or student loans), and mortgages. For each account, the profile may show the creditor's name, account number, date opened, credit limit or original loan amount, balance, and payment history.
Public records can include bankruptcies, civil judgments, and tax liens. However, the nationwide credit reporting companies have changed their reporting practices for certain public records, such as civil judgments and tax liens, due to accuracy concerns. Collection accounts are also listed.
Inquiries appear when a lender or other entity requests a consumer's credit file. Hard inquiries result from applications for credit, while soft inquiries occur from promotional reviews, account monitoring, or a consumer's own request for their report.
How Credit Reporting Companies Assemble Profiles
Data furnishers, such as banks, credit unions, credit card issuers, and collection agencies, send electronic updates to the national credit reporting companies. These updates are often sent monthly and include account status, balances, and payment history.
The credit reporting companies match the incoming data to consumer files using identifiers like name, Social Security number, and date of birth. Mismatches can occur, leading to information being placed in the wrong file or omitted entirely.
Public record information is gathered from court records and other sources. The nationwide credit reporting companies have modified their processes for public records, and some types of records are no longer included in reports.
The companies generally do not verify the accuracy of most information before including it. They rely on furnishers to provide accurate data, and they are required by the Fair Credit Reporting Act to follow reasonable procedures to assure maximum possible accuracy.
Differences Among the National Credit Reporting Companies
Equifax, Experian, and TransUnion are the three largest nationwide credit reporting companies in the United States. Each maintains its own separate database and does not share consumer files with the others.
Creditors may choose to report to one, two, or all three companies. As a result, a consumer's credit profile at one company may contain accounts or information that do not appear at another.
The companies may also have different policies for handling disputes, data retention, and the inclusion of public records. Therefore, a consumer's reports from the three companies can differ substantially.
Accessing and Reviewing Credit Reports
The Fair Credit Reporting Act gives consumers the right to obtain one free credit report every twelve months from each nationwide credit reporting company. The only federally authorized source for these free reports is AnnualCreditReport.com.
Reports can be requested online, by phone, or by mail. Additional free reports may be available in certain situations, such as after a fraud alert is placed or when a consumer is denied credit based on information in a report.
Reviewing credit reports allows consumers to identify inaccuracies, unauthorized accounts, or signs of identity theft. Federal law also provides the right to dispute inaccurate or incomplete information.
Disputing Inaccurate Information
Under the Fair Credit Reporting Act, consumers have the right to dispute inaccurate or incomplete information in their credit files. Disputes can be filed directly with the credit reporting company and with the furnisher that supplied the information.
When a dispute is filed, the credit reporting company must conduct a reasonable investigation, usually within thirty days. If information is found to be inaccurate, incomplete, or unverifiable, it must be corrected or deleted. The company must also notify the furnisher of the dispute.
If a consumer is not satisfied with the outcome, they can file a complaint with the Consumer Financial Protection Bureau or the Federal Trade Commission. Victims of identity theft can use IdentityTheft.gov to report and recover.
The Relationship Between Credit Profiles and Credit Scores
Credit scores are numerical summaries calculated from information in a credit profile. They are not part of the profile itself. Common scoring models include FICO and VantageScore, which are proprietary.
Scoring models consider factors such as payment history, amounts owed, length of credit history, new credit, and credit mix. The weight given to each factor varies by model and by the type of credit being evaluated.
Because credit profiles differ among the three nationwide credit reporting companies, scores calculated from those profiles can also differ. Lenders may use different scoring models depending on the product and their own underwriting criteria.
A consumer may have multiple credit scores, each based on a different profile or scoring model. There is no single universal credit score.
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Frequently asked questions
What is a credit profile?
A credit profile is a record maintained by a national credit reporting company that includes information about a consumer's credit accounts, payment history, public records, and inquiries.
How can I get my credit reports?
Consumers can request free credit reports from each nationwide credit reporting company through AnnualCreditReport.com, the only federally authorized source.
What is the difference between a credit report and a credit score?
A credit report is a snapshot of the information in a credit profile, while a credit score is a numerical summary calculated from that information using a scoring model.
Do all creditors report to all three credit reporting companies?
No. Creditors may report to one, two, or all three of the nationwide credit reporting companies, so a consumer's profiles can differ among them.
How long does information stay on a credit profile?
Most negative information, such as late payments, stays on a credit profile for seven years. Bankruptcies can remain for ten years. Some information, like inquiries, may be removed sooner.
Sources
Guides in this topic
What Is a Credit Utilization Ratio?
A credit utilization ratio compares the balance reported on a revolving account with that account's credit limit, expressed as a percentage. It is a derived figure, not a number stored in a credit file, and it changes whenever a balance or a limit changes.
Credit Builder Loan: Structure, Reporting, and Costs
A credit builder loan is a small installment loan where the borrowed principal is held by the lender instead of being paid out at closing. The structure, costs, and reporting practices vary by institution, so the terms in the loan agreement matter more than the product label.
Self Credit Builder Accounts and How the Structure Works
A self credit builder account is a savings-backed installment product that creates a repayment record in the consumer's name. This guide explains how those accounts are structured, what data is reported, and how the term is used by both consumers and companies.
Credit Builder Accounts: Definitions, Mechanics, and Reporting
Credit builder is a marketing label applied to several different financial products and services, not a single regulated account type. What they share is that account activity is reported to one or more national credit reporting companies.
Credit Builder Card: Definitions, Mechanics, and Reporting
A credit builder card is a marketing label, not a regulatory category, and it usually describes a secured revolving account. What the account actually does depends on the deposit terms, the fees, and whether the issuer reports activity to the nationwide credit reporting companies.
Credit Agencies: What the Term Covers and Who Regulates Them
The phrase credit agencies is used loosely in the United States and can point to several different kinds of organizations. This guide separates the main categories and explains how consumer files are assembled, disclosed, and overseen.
Related terms
- A Credit Utilization Ratio A credit utilization ratio is the amount of revolving credit a consumer is using divided by the total revolving credit available to them, usually expressed as a percentage.
- Credit Builder A credit builder is a financial product or account that reports a consumer's payment activity to credit reporting companies, typically used to establish a credit history.
- Credit Builder Card A credit builder card is a type of credit card, often secured or with a low credit limit, marketed to consumers with limited or no credit history, which may report account activity to national credit reporting companies.
- Credit Builder Loan A credit builder loan is an installment loan in which the borrowed funds are held in a savings account or similar account and released to the borrower after the loan is repaid, with payments typically reported to national credit reporting companies.
- Self Credit Builder A Self Credit Builder is a type of credit-builder account, often structured as an installment loan or secured deposit account, in which a consumer makes scheduled payments that are reported to national credit reporting companies.