What are Credit Reports
Credit reports are detailed records of a person’s financial activity. They are obtained from three major credit bureaus in America: Experian, TransUnion, and Equifax. Every time one uses or applies for credit, financial institutions send the information to the credit bureaus where the information is added to the user’s credit profile. These data are used to calculate one’s credit score, which is a rating of his or her creditworthiness—the likelihood that he or she will pay back loans on time and the amount of risk he or she poses to the lenders when borrowing money.
The most commonly used scoring system is FICO, which has been developed by the Fair Isaac Corporation. FICO scores range from 300 to 850, with 680 as the minimum desirable score. The website myFICO (myfico.com) offers comprehensive information on credit scoring and on improving one’s FICO scores.