A credit report is a detailed summary of your credit history along with other information pertinent to your identity. Potential creditors and lenders use your credit report as a tool in their decision-making process to decide whether to extend you credit and on what terms.  Your credit report may also be used as a tool to measure risk factor by other companies, such as rental and insurance agencies.

While the bureaus are often lumped together, they are actually separate companies who compete against each other for business. Although most of the information gathered by the bureaus is similar, there are differences in their scoring models that affect your overall score with each bureau. Learning about their differences and how they work, will help you better understand the components in your credit report.

Getting an Equifax credit report is easy, but understanding the data and how it is retrieved can be tricky. The following are summaries on each basic section as well as an explanation on how each section affects your credit score.

Credit History Usage

Equifax retrieves its’ information from your creditors, such as banks, auto finance companies, or credit card issuers. In general, a longer credit history will increase your credit score. However, even if you haven’t been using credit long you may still have a high score, depending on how the rest of your credit report looks.

The length of time that information remains on your credit report depends on the type of information and whether it is considered “positive” or “negative.”

Here is a breakdown of some of the different types of “negative” information retrieved from your credit history that can affect your credit score:

Late Payments: This information stays on your Equifax credit report for up to seven years from the original delinquency date (the date of the missed payment). The late payment remains on Equifax even if you pay the past-due balance. For example, if you had a late payment in June 2010, the late payment would disappear off your Equifax credit report June 2017, seven years later.

Collection or Charged-off Accounts: This refers to accounts that have a late payment and the past-due amount is never paid. These type of accounts are usually charged off (the original lender wrote the account off as a loss and it’s no longer accruing charges) and assigned to a collection agency. If that happens, the account will disappear seven years after the first missed payment was reported to Equifax by the lender. If you pay the balance before the seven years, it remains on your report but may have less of an impact on your Equifax credit-score.

Bankruptcy: This stays on your Equifax credit report from seven to 10 years, depending on the type of bankruptcy.

Other Negative Accounts: These accounts include repossessions, foreclosures, and short sales or a deed in lieu of foreclosure. They remain on your credit report up to seven years from the first missed payment that led the account to negative status.

There is also “positive” information that is retrieved from credit history that can affect your credit score. Some of the most common are:

Active Accounts-Paid as Agreed: Accounts that are active and paid on time remain on your Equifax credit report as long as the account is open and the lender is reporting it.

Closed Accounts- Paid as Agreed: If the lender reports the account as paid on time, it will remain on your credit report up to 10 years from the date it was reported to Equifax as closed.

Regularly checking your Equifax credit report is an important step to ensure the information is accurate and complete.

Understanding FICO Score

Fair Isaac Corporation (FICO) scores are the most widely used; 90% of top lenders use FICO scores when making credit-related decisions. Your personal credit score is built on your credit history. Base FICO scores have a 300-850 score range. Experian’s credit score ranges from 280-850. The higher the score, the less of a credit risk you are. In order to have a FICO score, you need to have at least one account that has been open for six months or longer, and at least one account that has been reported to the credit bureau within the past six months.

As information in your credit report changes, so will your credit score. The change in your score is based on your credit report. Generally, there are 30 days between fluctuations in your credit scores.

Before credit scores, lenders would physically look over each applicant’s credit report to determine whether or not it was beneficial to extend credit and the terms that the credit should be released on. The process was time consuming and according to Experian.com, the results were bias and lenders were making decisions that had little bearing on the applicant’s ability to pay. Today, credit scores help lenders assess risk with fairness.

A credit score cannot be measured without knowing its score range. FICO score ranges have variations depending on the type of loan you are seeking. Here is a breakdown of the most commonly used score range:

  • Exceptional 800-850: People with scores in this range typically experience easy approval when applying for new credit, and are more likely to be offered the best lending terms which includes lower interest rates.
  • Very Good 740-799: Scores in this range tend to allow borrowers a good interest rate from lenders.
  • Good 670-739: FICO scores in this range is what the average U.S. consumer falls under. Lenders tend to view individuals in this range as “acceptable” borrowers. Loan terms in this range are likely to include interest rates somewhat higher than the best available.
  • Fair 580-669: Lenders may disqualify individuals with these scores if they apply for mainstream loans. Loans that are offered in this range have interest rates significantly higher than the best available.
  • Poor 300-579: Many lenders will decline credit applications from consumers with a score in this range. Applicants seeking a credit card may only qualify for a secured account that requires placing a cash deposit equal to the card’s spending limit.

Calculating Your Credit Score

Scores are calculated using different factors of data in your credit report. The data is categorized into five categories:

  1. Payment History: This is 35% of your credit report. This is one of the most important factors in a credit score. The first thing most lenders want to know, is your payment history. This helps determine the amount of risk associated with extending credit. Keeping your accounts in good standing will build a positive payment history.
  2. Amounts Owed: This portion of your score is 30%. Having multiple open accounts builds your credit; however, if you are using a lot of your available credit, banks can interpret this to mean you are at a higher risk for defaulting. According to Credit.org, “Your utilization should be 30% or lower to avoid having a negative effect on your credit score.”
  3. Length of Credit History: This accounts for 15% of your credit score. This section refers to how long any given account has been open and appears to fall in the middle of importance within these five categories. In theory, a longer credit history shows you have more experience using credit and lenders can be more accurate when determining the level of risk they take on when lending to you.
  4. New Credit: This is only 10% of your credit score but can be harmful if you try to open many accounts rapidly. Research shows that opening several credit accounts in a short period of time represents risk to inquiring lenders. This is especially true for individuals who don’t have a long credit history.
  5. Credit Mix: This is 10% of your credit score and does not have a major impact on your score. The different types of credit that might be part of a consumer’s credit mix include credit cards, student loans, automobile loans and mortgages. While having a mix of different types of credit can have a positive impact on a credit score, FICO (and common sense) cautions that consumers should not apply for loans or credit cards they do not need in an attempt to improve this component of their credit score.

There are free calculators available online that can estimate your credit score as well as simulate your score.

Understanding Your Credit Report and Scores

Equifax lists accounts in groupings of “open” or “closed.” This makes it easy to see your current accounts versus old accounts. Equifax provides an 81-month credit history. In general, most large lenders don’t rely exclusively on a bureau’s score; they use information from your credit report and apply their own metrics to review a person or company when considering extending credit.

Your Equifax credit report contains four types of information:

Identifying Information: This section of your report includes personal information, such as your name, previous names, address, Social Security number, and your date of birth. The identifying information that is listed in your Equifax report, is the only section not used to calculate credit scores.

Credit reports do not include information about your gender, race, color, religion, occupation, or natural origin.

Credit Accounts (also known as “existing credit” and/or “tradelines”): Your Equifax credit report lists your current and your past credit accounts. Equifax generally refers to these as tradelines. Tradelines contain information on the type of account listed, such as credit card, mortgage, auto loan, and student loan. It will also list the date you opened the account, your credit limit or loan amount, account balance, and your payment history with the creditor and/or lender.

Bankruptcies and Collection Information: Bankruptcies and past-due accounts that have been turned over to a collection agencies are listed in this section. This section may also include court judgements against you, criminal convictions, and any tax liens against your property.

Inquiry Information: Companies or persons who have pulled a copy of your Equifax report is known as an “inquiry”. There are two types of inquires that maybe listed in your Equifax report: “soft” inquires and “hard” inquires. A “soft” inquiry typically occurs when you or a third party reviews your credit for non-lending purposes. These are only visible by you and they do not affect your credit score. A “hard” inquiry is typically recorded on your credit report whenever a lender reviews your credit. “Hard” inquiries remain on your credit report for 24 months and they do affect you credit score.

Equifax keeps a list of all your credit applications that have been made. This information does not impact your credit score, its general purpose is to help consumer’s monitor their identity.

Both the Equifax credit score and FICO score are determined using general-purpose scoring models. This means that their numerical range is set-up to indicate that a higher credit score indicates a lower credit risk.


It is important for consumers to monitor their credit report for accuracy, because it can affect the accuracy of your credit score. It is helpful to note that the three different credit bureaus may record, display, and store information in different ways.

Consumers are entitled to a free credit report once every 12 months. Request your free credit report:

Online: Visit AnnualCreditReport.com

By Phone: Call 1-877-322-8228. Deaf and hard of hearing consumers can access the TTY service by calling 711 and referring the Relay Operator to 1-800-821-7232.

By Mail: Complete the Annual Credit Report Request Form and mail it to:

Annual Credit Report Request Service

PO Box 105281

Atlanta, GA 30348-5281

If you find that there are errors in your Equifax credit report, you may dispute the error and request that it be removed or corrected. To do this, you should contact either Equifax or the company or person that provided the incorrect information to Equifax.

Lastly, Experian allows a person to add a note to their credit report explaining unusual circumstances and clarifying specific issues. Lenders may take these notes into consideration when analyzing a consumer’s creditworthiness.