Definition
A credit report is a summary of a consumer’s history of debt repayment which also measures the creditworthiness of the consumer.
Analysis
Credit reports have been around since Retail Credit Company (see Equifax) began collecting and reporting consumer information in 1899. Consumer credit reporting began growing faster with the proliferation of consumer credit cards in the 1960s and beyond.
Credit reports document the way a consumer manages their credit accounts. The items contained within the report are also weighted according to various criteria in order to measure the creditworthiness of the consumer. This measure is expressed as a credit score, which serves as an indicator of the consumer’s risk of default.
A credit report is generally divided into the following sections:
- personal identification information
- public records
- credit history
- inquiries
Inquiries are requests to see a credit report. These may be initiated by the consumer or any other entity with a permissible purpose to view the report.
Creditors may report items to credit bureaus for inclusion in consumer credit reports for a nominal fee. Consumers may dispute inaccurate information on their credit report without charge.
