The terms credit report and consumer reports may sound similar, but they are actually very different things. Credit reports are more common versus consumer reports, which are more rare. Both types evaluate you as a potential risk, and both are regulated by the Fair Credit Reporting Act or FCRA. Let’s dig into each one to find out more.
What is a Credit Report
Credit reports are collected and maintained by the three big credit reporting agencies (Equifax, TransUnion, and Experian). These companies collate all types of financial data about you as well as some personal details. If you have ever had a mortgage, bought a car, have credit cards, or taken out a loan, you have a credit report.
A credit report contains your name, your birth date, your home address, and your social security number. This is personally identifiable information that can be used with identity theft, which is why the Equifax and Experian data breaches were so alarming.
Credit reports also contain your entire credit history, including any loans, credit cards, student loans, mortgages, and other debts you have had over the past seven years. The credit reporting agencies keep details on each one from when the account was opened, your payment history (did you pay on time, late or not at all), and when and how the account was closed. Foreclosures and bankruptcies also show up on your credit report in a negative way.
What is Fico Credit Score
Credit reports use all this information to calculate your FICO score, and lenders consult these reports and your credit score when making a decision whether or not to lend you money. Hence, it is crucial that you monitor your credit.
Who Can Check My Credit Report
Financial institutions, banks, and other creditors can access your credit report. However, by law, they have to prove a “viable business interest,” in you to get a copy. Insurance companies and the government can also get a copy. In some cases, the courts can request your credit report in conjunction with things like child support or alimony. Employers and landlords can only get a copy with your written permission. You are entitled to a free copy of your credit report from all three agencies once per year. The Federal Trade Commission (FTC) is the government agency that oversees and enforces laws pertaining to credit reports and identity theft.
What is a Consumer Report
A consumer report also referred to as a background check is a tool used by licensing agents, employers, landlords and others who want to evaluate you before they hire you to do a job, provide some type of certification to you or allow you to access secure or valuable items.
Unlike a credit report, consumer reports include a lot of different types of information. The information comes from various sources instead of just one. A typical background check or consumer report may consist of your credit report, along with criminal history, arrest records, public records, and other information. Some examples of the type of information which can be uncovered by a consumer report are:
Arrests.
Warrants.
Criminal charges.
DUIs.
Felonies.
Misdemeanors.
Jail records.
Police reports.
Mugshots.
Incarcerations.
Lawsuits.
Marriages & divorces.
Fingerprints.
Assets (cars, boats, properties, aircraft, etc.).
Some consumer reports dig a little deeper and pull your entire educational history, employment records, military data, medical records, and even your social media activity. Personal information like previous addresses, relatives, email addresses, and any licenses and certifications will also show up.
The purpose of consumer reports is not to evaluate your creditworthiness but instead your personality type, your dependability and determine if you are a good fit for the job, license or clearance you are being evaluated for.
Concluding Remarks:
In summary, a credit report has a singular purpose: to determine your risk factor before lending you money. Your consumer report fleshes out an entire personality profile to assess your suitability for whatever the person or company needs from you.
FAQs
A credit report will document which accounts are in good standing, if any debts are past due, and other information about your financial history. A credit report, however, is a type of consumer report. A consumer report is a broader report that contains personal identifying information beyond credit.
What is the difference between consumer report and credit report? ›
An investigative consumer report is akin to a detailed background check in which your character and reputation are assessed. This kind of report is not usually used to assess creditworthiness, but rather your viability as a potential employee or tenant. It is different from a credit report.
What is the difference between consumer disclosure and credit report? ›
A consumer disclosure is a personal credit report that only you can access. It includes all the information a lender would see if they pulled your credit report, along with all soft inquiries and any information that has been suppressed. A lender may suppress information if it was the result of fraud.
What is the biggest difference between a credit score & credit report? ›
Many people use the terms “credit report” and “credit score” interchangeably, but they are not the same. Your credit report is a detailed account of your credit history, while your credit score is a three-digit number signifying your credit-worthiness.
Are consumer reporting agencies the same as credit reporting agencies? ›
Credit reporting companies, also known as credit bureaus or consumer reporting agencies, are companies that compile and sell credit reports. Credit reporting companies collect credit account information about your borrowing and repayment history including: The original amount of a loan. The credit limit on a credit ...
What shows up in a consumer report? ›
A consumer report can contain a wide variety of information including credit history, past bankruptcy, judicial records, employment records, and even online activity. This information can only be accessed with approval from the individual and is highly regulated by the Fair Credit Reporting Act (FCRA).
Does pulling a consumer report hurt your credit? ›
No, requesting your credit report will not hurt your credit score. Checking your own credit report is not an inquiry about new credit, so it has no effect on your score.
Do I have to agree to a consumer report? ›
The applicant or employee must agree in writing to the release of the report to the employer. This written permission may be given on the notice itself.
What is the best site to get free credit report? ›
Avoid Other Sites Offering Free Credit Reports
You might see companies and sites offering free credit reports, but there's only one authorized place to get the free annual credit reports you're entitled to by law: AnnualCreditReport.com.
Which is better TransUnion or Equifax? ›
Neither your TransUnion or Equifax score is more or less accurate than the other. They're just calculated from slightly differing sources. Your Equifax credit score is likely lower due to reporting differences. Nonetheless, a “fair” score from TransUnion is typically “fair” across the board.
The primary credit scoring models are FICO® and VantageScore®, and both are equally accurate. Although both are accurate, most lenders are looking at your FICO score when you apply for a loan.
Which of the 3 credit reports is best? ›
There is no “best” credit bureau—all three bureaus can offer helpful information and tools to help you make financial decisions.
Which of the 3 credit report is most accurate? ›
Which of the 3 Credit Bureaus Is the Best? Of the three main credit bureaus (Equifax, Experian, and TransUnion), none is considered better than the others. A lender may rely on a report from one bureau or all three bureaus to make its decisions about approving a loan.
Who are the top 3 consumer credit reporting agencies? ›
There are three big nationwide providers of consumer reports: Equifax, TransUnion, and Experian.
What qualifies as a consumer reporting agency? ›
(f) The term “consumer reporting agency” means any person which, for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to ...
Who regulates credit and consumer reports? ›
The Fair Credit Reporting Act (FCRA) regulates the consumer credit reporting industry. In general, the FCRA requires that industry to report your consumer credit information in a fair, timely, and accurate manner. Banks and other lenders use this information to make lending decisions.
Does a consumer report include credit? ›
They can include information from a variety of sources, including credit reports and criminal records. When you use consumer reports to make employment decisions, including hiring, retention, promotion or reassignment, you must comply with the Fair Credit Reporting Act (FCRA).
Is a consumer score the same as a credit score? ›
Consumer credit scores, also known as educational credit scores, are credit scores that can be accessed by consumers. Typically, consumer credit scores only use information from one of the credit bureaus. Additionally, they're calculated using consumer scoring models, rather than mortgage credit scoring models.
What is a consumer credit report? ›
Your credit report includes details about your credit history, including the number of credit accounts you have open, as well as closed accounts; your history of on-time and delinquent payments; accounts that are in collections; the number of times you have applied for credit; and more.
What are the two types of credit reporting? ›
Your credit score is calculated based on the activity on your credit reports, provided by the three credit bureaus — Experian, Equifax and TransUnion. The two most widely used types of credit scores are FICO Score and VantageScore.
