What is a Credit Check? | What is on a Credit Report | How Often Does a Credit Report Update

What is a Credit Check

What is a credit check? It is when a lender looks at your credit history to determine if you are eligible. This check is carried out so the lender can understand your financial behavior.

What Is A Credit Check

What is a Credit Check & How Does Credit Checks Affect Your Credit Score?

To an extent, hard inquiries can ding your credit score. This is because, if you apply for multiple new credit lines in a short span of time, you may be seen as a higher risk which may slightly affect your score  temporarily. This however, is dependent on the type of loan generating hard inquiries. So, if it is a the type that normally involves rate-shopping, a student loan, auto loan, or mortgage, your FICO score will ignore if you’ve had a spurt of applications in the 30 days before scoring. It will just be perceived that you are looking for the best rate.

Can Someone Check Your Credit Without Your Permission?

Except with your permission, someone else does not have the authority to check your credit if it’s a hard inquiry. But exceptions apply if you are trying to apply for a loan or job, buy a new car, or rent an apartment, the company you want to do business with, is to get your permission before checking your credit.

For soft inquiries, there can be exceptions, in that a credit check canbe carried out without your permission. But you have nothing to worry about, because soft inquiries do not ding your credit scores and in most cases can be seen by you.

Whenit comes to legal matters, government benefits, child support, investments and insurance, your credit reports can be accessed without your permission.

What is on a Credit Report?

A credit report contains personal details, credit account history, credit inquiries and public records, and this information is reported by your lenders and creditors to the credit bureaus. Much of these information is used to calculate your FICO® Scores to intimate future lenders about your creditworthiness.

Note, that each of the credit bureaus, Experian, Equifax and TransUnion, format and report your information differently, all credit reports contain basically the same categories of details.

These four categories of information are; credit inquiries, identifying information, public records and credit accounts.

Personally Identifiable Information (PII)

This contains your name, address, social security number, date of birth and employment information which you can be identified with.

Credit Accounts

Here, lenders report on each account you have established with them. They report the type of account (credit card, auto loan, mortgage etc.), the date you opened the account, your credit limit or loan amount, the account balance as well as your payment history, and including whether or not you have made your payments on time.

Credit Inquiries

Credit inquiries happen when you apply for a loan, you authorize the lender to ask for a copy of your credit report.

Public Record and Collections

Here, credit bureaus collect public record information from state and county courts including bankruptcies. Note also that debt that has been overdue and has been sent to collections also pops up on your credit report.

What is a Credit Check & How Often Does a Credit Report Update?

Now  there’s no one answer to this question because most lenders, especially credit card issuers, report once per month to the bureaus and others may report daily and others on drnsbd. Other types of lenders might report less often, and even then, not all lenders report to all of the three credit bureaus. Thus if you are not certain about your lenders mode of operation, simply ask your lender to clarify how often it reports your payment history as well as which bureaus it reports to.


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