Pioneer Report

The United States economy is based on credit. For most people, whether they are buying a home or financing a car, it means arranging a loan from a bank or finance company. Young people, too, get loans to pay for college tuition. And, of course, for day-to-day purchases, many people use credit cards.

We can't expect to get credit simply because we want it. You must apply for it. Just as you would be hesitant to lend to a stranger, so it goes for the bank, finance company, or retailer. Before lending to you, they want to know something about you. Before computers, this would require a call to each creditor you list on your application. If, after calling your creditors, they were satisfied, only then would they extend you a loan.

Why Does the Credit Report Exist?

Creditors would spend significant time and energy to verify the creditworthiness of borrowers. They would call, mail, or meet with other creditors to get an idea of your risk to them. Often, this was time consuming and not very efficient. A borrower who appeared a good risk one day may have incurred numerous additional debts by the time the loan is approved. Or, creditors may not turn up until after a loan had been made. The creditors thought, "there has to be a better way."

The credit report was born.

A credit report gives a record of your credit activities. It lists credit card accounts, loans, balances, and how often you make payments. It shows if any action has been taken against you for unpaid bills.

Today, there are three major credit reporting agencies for consumer loans, nationwide. For local markets, there are many smaller companies.

Who gets to see my credit report?

Consumer reporting agencies provide information only to the following:

• 1) creditors who may give or have given you credit;
• 2) employers who may hire, promote, reassign, or retain you;
• 3) insurers considering you for an insurance policy;
• 4) government agencies that review your financial status to issue certain licenses, or government benefits; and,
• 5) anyone with a legitimate business reason for needing your credit information for a business transaction that starts with the consumer.

Reporting agencies furnish credit reports if required by court order or federal jury subpoenas. Also, they will issue your credit report to a 3rd-party with written instructions from you.

What information is in a credit report?

Expect to see four types of information:

• 1) Identification. Your name (with the Sr., Jr., or III), nicknames, current and previous addresses, Social Security Number, date of birth, current and previous employers, and spouse's name (if married).
• 2) Credit history. Your accounts with banks, retailers, credit-card issuers, and other creditors. The accounts list by type of loan (mortgage, student loan, revolving), the date you opened the account, your credit limit or loan amount, co-signers, and your payment pattern for the last 2 years.
• 3) Public record information. Records on bankruptcy in State and county courts, tax liens, and judgments. (Some reporting agencies include nonmonetary judgments.)
• 4) Inquiries. The names of any who have obtained copies of your credit report within the last 6 months (2 years for employment purposes).