Credit reports provide great details about a person including name, birth date, Social security number, home address, how payments are made, income, employment history, home ownership, previous address, court cases, judgments, and bankruptcy and foreclosure records.
Above all it gives details about a person's credit history. These include all the creditors with balances and accounts that are closed or in collections. It will also indicate if there are any late payments, and any other irregularity. In addition it will also list the requests for that credit report by creditors during the past year and requests for credit reports including those by employers for the past two years.
These reports are maintained by three nationwide credit bureaus which use slightly different sources to compile the information. Based on the information they have credit bureaus calculate a figure called the credit score. The three credit bureaus Equifax, Transunion, Experian use different formulas to arrive at their score. The credit score can be considered a mathematical way of determining the likelihood of the borrower paying back a loan.
This information can be accessed by creditors, insurers, employers, and others who have been legitimately allowed access subject to conditions through The Fair Credit Reporting Act (FCRA). It is clear that accurate information in the credit report is important to everyone concerned not only for the person about whom it is concerned but to anyone else who may want to rely on it for decision making. As such it is important to understand how the credit report is compiled and the accuracy of the information and sources on which that compilation is made.
It is important to know how and at what frequency credit information reaches the credit bureau. On examination of their procedure, it is clear that frequency of reporting varies depending on the creditor. While some creditors will report any changes in the customers' balances every day, others will report once a month or at longer periods. This is mainly due to efficacy reasons, since with most people there will not be much of a change in credit balances. Because of that creditors will only report if there are any changes in the credit balances. This therefore means that for some people their credit report will get updated about once a month while others may not see any change in their credit reports for 3 or 6 months. On the other hand creditors will report late payments and other negative activities quite promptly.