FAQ: Credit Reports
At Atlas Consumer Law, we are committed to helping clients throughout Illinois resolve their credit reporting disputes. Below, our consumer law lawyers answer some of the questions we are commonly asked about credit reporting.
Question: What is in my credit report?
A: All of your credit activity and credit history is contained in your credit report. The following things can be reviewed on your credit report:
- The names of companies that have given you loans or lines of credit
- All of your credit limits and loan amounts
- Your payment history
- Delinquent accounts, bankruptcies, foreclosures, or lawsuits
Question: Can I get a free credit report?
A: Each year, you can request a free copy of your credit report from the three national credit bureaus. You should look over the information contained in your credit report once a year to make sure there are no errors and that all of your personal information is accurate.
Question: Why is my credit score important?
A: Your credit score is a three-digit number that lenders use to determine whether they should lend you money for a mortgage, loan, or credit card. If your score is too low, lenders won’t approve you or you will get a higher interest rate on your loan.
Question: If I check my credit report, will it hurt my score?
A: There are two types of credit inquiries: hard and soft inquiries. Checking your own credit report counts as a soft inquiry, so your score should not be affected.
Question: How is my credit score determined?
A: Credit reporting agencies use the following algorithm to determine your score:
- Your Payment history is 35% of your score
- The amount you owe lenders is 30% of your score
- The length of your credit history is 15% of your score
- The types of credit accounts you have are 10% of your score
- New credit accounts are 10% of your score
Agencies tally up all of these values and then give you a score ranging between 300 and 850. If you have a high score, lenders will be more willing to open lines of credit for you.
Question: What can hurt my credit score?
A: Making late payments or missing payments completely can have the biggest impact on your score. Your overall credit history demonstrates if you are a responsible borrower, which is why it is important to make all of your payments on time.
Call (312) 313-1613 to schedule an appointment with our lawyers if you have more questions about your credit report.