What Is a Credit Report?

By Jeremy Bowman – Updated Feb 25, 2025 at 11:36 PM

Key Points

Credit reports detail your financial history and impact loan terms like interest rates.
You can improve your credit by paying on time and managing credit account balances.
Regularly review your free annual credit reports from major agencies to spot inaccuracies.

When you sign a lease or enter into a financial contract, your counterparty will want to ensure you can fulfill your end of the deal and pay your bills. There's no perfect way to do this, just as there's no perfect way to predict the future, but the most common way is to pull your credit report.

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A close-up of a credit report and pen. — Image source: Getty Images.

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Bankruptcy

A legal process handled in federal court in which an individual or business can have their debt forgiven or restructured.

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Lenders will often pull more than one credit report since the reports can contain different information. They also contain your all-important credit score, also known as your FICO score, which is used to determine your creditworthiness.

It's a good idea to review your own credit report every once in a while to see whether anything looks inaccurate or how the reports differ. By law, you can get a free credit report from each of the three major agencies once a year. If you're interested in improving your credit score, it makes sense to review the reports.

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Once you've started borrowing, it's important that you don't miss payments. Missed payments can be reported to credit agencies, negatively affecting your score. It's also a good idea to pay down past-due accounts and revolving credit balances.

Finally, once you've established your credit file, it's a good idea to limit your applications for new accounts since applying for new credit lines can lead to a hard inquiry, meaning creditors pull your credit report. That can have a modest effect on your credit score.

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The next page might contain information from adverse accounts, including outstanding and late debt payments. Finally, there's a page devoted to accounts in good standing, known as satisfactory accounts, and a list of credit inquiries, which show which lenders have pulled your credit report.

What's in your credit report? There's only one way to find it. Get your free copy and find out how you can improve your creditworthiness.

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About the Author

Jeremy Bowman has been a contributing Motley Fool stock market analyst, covering technology, consumer goods, and macroeconomic trends since 2011. Before The Motley Fool, Jeremy was a newspaper reporter, restaurant manager, and English teacher abroad. He holds a bachelor’s degree in English from Colorado College and a master’s degree in business administration from American University. One of his Motley Fool headlines was briefly featured on Late Night with Stephen Colbert.

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