Understanding your credit report and score

You’re in luck! We want to give you the better financial footing, which is why we created The Ultimate Beginner’s Guide to Credit Scores. This free downloadable eBook includes nearly everything you need to know about credit scores: how a good score opens doors, how to read a credit report, and so much more. Get basic definitions, helpful tips, and printable worksheets all in one spot!

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Add our eBook to your TBR pile or get a brief overview of credit reports and scores in the sections below. 

How do I access my credit report?

According to the Fair and Accurate Credit Transaction Act (FACT Act), you can request a free credit report once every 12 months from each of the three major credit bureaus: Equifax®, Experian®, and TransUnion®. They have joined efforts to offer a centralized way to obtain information about your credit reports through: www.annualcreditreport.com. This secure site allows you to request, view, and print your report, and also offers options to request your report by phone and mail.

How often should I get hold of my credit report?

This is entirely up to you. You may request one from each bureau at the same time to compare your information. You won't, however, be able to request another free report for 12 months (you can purchase other reports anytime; the maximum cost that can be charged is $10.50). Another idea is to request your report about every four months from one of the bureaus (rotate the bureau you select).

What’s on a credit report?

• Your payment history is documented–including late payments. A payment status represented by a letter may be displayed next to an item, e.g., ‘C’ is collections.
• Personal information. This section shows your birth year, names or addresses associated with your credit, phone number, spouse or co-applicants, and current and former employers.
• Account information. The installment loans or revolving credit accounts you have with a lender will appear on your credit report. 
• Credit inquiries. Soft or hard pulls on your credit report. A lender completes a hard pull on your report when you apply for a loan, like a credit card or mortgage. Your want for more credit is seen as an indication of your credit habits. For this reason, hard pulls stay on your report for two years and can cause your score to fluctuate. A soft pull–such as when you check your own score–is noted on the report but doesn’t affect your score. 
• Collection accounts. A creditor may turn a debt over to a collection agency if the account is significantly past due. This will show up separately from other accounts on your credit report and can remain with you for seven years. 
• Courthouse and public records. Bankruptcy Chapter 7 or 13 is the only public record on your credit history. 

What is a credit score?

Your credit score is on your report, but it can be checked separately for free throughout the year. Lenders use this three-digit number to objectively measure your creditworthiness. It allows creditors to rank you from high to low in respect to the likelihood of repaying credit. For example, if you have a high score, you're likely to repay. If you have a low score, you're less likely to repay. 

Your credit score is a snapshot of your finances at a particular moment in time. As information in your credit file changes, so will your credit score. For instance, if you use your credit card or make a payment to your car loan, these activities are going to change the information in your credit file.

Note there are different credit scores used for different purposes. Some banks and credit unions may look to one bureau over another for a specific type of loan. For example, they may turn to Equifax® for consumer or auto loans but pull from all three credit bureaus for mortgage applications. 

What factors are taken into consideration for your credit score?

There are five different categories that are considered for your credit score.

• Payment history. This is probably the most important factor. Have you had an account sent to collections? How many times have you been late? How late or how recent were those late payments?
• Amount owed. How much overall debt do you have? How many credit cards have balances on them? How many are close to their limits? How close are you to your overall credit limit?
• Length of credit history. Are you an emerging consumer or someone who has paid bills on time for 10 years?
• New credit. Are you shopping for credit right now? A lot of activity and inquiries on your credit report raises suspicion. Perhaps there is a change in your life that is not reflected on your credit report, like a divorce or lost job. These situations may impact your financial situation.
• Types of credit used. Do you have a "healthy" mix of credit cards, secured loans, a mortgage loan, and so on? Lenders like to see a diversified portfolio because it shows you can responsibly manage multiple lines of credit. 

What can you do to improve your credit score?

The best way to improve your credit standing is to pay bills on time and keep your balances low on credit cards or any other revolving accounts. Also, check your credit report at least once a year to make sure the information is correct. Inaccurate information could negatively influence your score.

Where can you find your credit score?

Great news! Qualifying GECU members using Online Banking and mobile app can get their FICO® Score for free. We want to help with Improving the Quality of Your Financial Life, and access to your credit is an important piece in the puzzle. Check out our dedicated FICO® Score page to see if you are eligible. 

Additionally, companies like Experian, Equifax, and TransUnion can provide your credit score and an explanation for the items listed. When utilizing: www.annualcreditreport.com to obtain your report, they will give you the option of seeing your score at the same time. There is typically a minimal fee involved. 

Want to reach one of the top three credit reporting agencies? You can reach them at: 

• Experian: PO Box 949, Allen, TX 75013-0949; 888.EXPERIAN (888-397-3742)
• Equifax: PO BOX 740241, Atlanta, GA 30374-00241; 800-685-1111
• TransUnion: PO BOX 1000, Chester, PA 190222; 800-916-8800

General Electric Credit Union is a full-service financial institution headquartered in Cincinnati with branches in Ohio and Kentucky.