Consumer Credit File

A consumer credit file is a collection of data about an individual’s borrowing and repayment activity. Your credit file contains the information that determines your credit score. When you apply for an automotive, mortgage or other type of loan, the financial institution will check your credit file to see whether you appear to be a good or bad credit risk. You can see what’s in your credit file by requesting your credit report from each of the three main credit bureaus.

A consumer credit file contains your basic identifying information, including your name, Social Security number, address and phone number, along with any other previous names, addresses and phone numbers. It sometimes shows your current and former employers as well. The credit file shows what types of debt you have, which may include credit cards, installment loans, mortgages and more. It shows who has inquired about your credit in the past two years and when they inquired, and it contains any negative credit information such as bankruptcies, liens, judgments and past due accounts that have been sent to collections.

Most of your consumer credit file is dedicated to information about your current and past accounts, including when you opened each account, what your highest balance has been, the type of account (whether it is an individual or joint account), the account balance, the date of your last payment and the amount of your last payment. For each account, your credit file also shows whether you have made payments on time each month, how late any late payments have been, and whether your account has ever been delinquent.

Consumers have three credit files, one with each of the three major credit bureaus: Experian, Equifax and TransUnion. Sometimes all three files contain identical information, but sometimes one file will contain an account that another file does not. Some lenders and creditors do not report their customers’ borrowing and repayment activity to all three bureaus, which creates differences among the same consumer’s credit files.

Sometimes, consumers confuse the terms credit file and credit score, or use them interchangeably. One way to think of it is that the information in your credit file determines your credit score. The credit score itself is a statistical number based on an algorithm that measures your credit risk using the information in your credit file. Many consumers know that creditors and lenders use the credit score to help determine whether or not to give you credit. But it’s also helpful to know that your credit score often is used to help determine the terms you are offered or the interest rate you will pay for a loan. Usually, the higher your credit score, the lower the interest rate you’ll have to pay.