Understanding Credit Reports

In the United States, three credit bureaus essentially control the market. They are Trans Union, Experian (formerly TRW) and Equifax. Your source of credit reports probably deals with one of these companies.

All three bureaus receive their information from the same sources, so it doesn't usually matter which one provides the information to you. On rare occasions, though, the reports do not always agree.

The release of credit information is regulated under the Fair Credit Reporting Act. Before you can legally secure an applicant's credit report, you must receive his written authorization. Your Rental Application may include the language or you may want to provide a separate form. Keep the authorization in your file.

WARNING!

Beginning June 1, 2005, businesses with employees cannot throw out documents containing workers' or customers' personal information without first destroying them--they must be shredded, burned or otherwise made unreadable.

The law is among new provisions added to the Fair and Accurate Credit Transactions Act.

The rules were designed to reduce the risk of identity theft and other consumer harm resulting from improper disposal of consumer reports or any records derived from them.

Under the rules, all businesses will be required to destroy any consumer credit information they have obtained from credit reports.

"Any person who maintains or otherwise possesses consumer information for a business purpose" must properly destroy the discarded information, under the new credit transaction rules.

An organization must "dispose of such information by taking reasonable measures to protect against unauthorized access to or use of the information in connection with its disposal," the rules state.

Business owners could face fines of $1,000 per violation and be sued for actual damages caused by improper access to personal information.

The full text of the rule is available at http://www.ftc.gov/os/2004/11/041118disposalfrn.pdf

The credit report will list current/previous address(es) and employer(s) and will contain information about known bankruptcies, collection accounts and court judgments (including evictions) that are in the public record. Additionally, it provides credit and payment information from the applicant's creditors.

Credit reports come in many formats, but the description that follows will provide a general understanding of the report's contents. The format shown is from Equifax.

* NAME; SINCE - DATE FILE WAS ESTABLISHED; FAD - DATE OF LAST ACTIVITY ON FILE; FN - FILE NO. CURRENT ADDRESS, PRIOR ADDRESS(ES)
* SUM = SUMMARY OF FILE ITEMS; MM/YY - MM/YY = OLDEST OPENING DATE OF TRADE, NEWEST REPORTING DATE OF TRADE; PR/OI = IF YES, SUBJECT HAS PUBLIC RECORDS; FB = IF YES, INFO FROM OTHER (NON EQUIFAX) CREDIT BUREAUS; ACCTS = NUMBER OF ACCOUNTS; HC = HIGH CREDIT RANGE
****PUBLIC RECORDS****
DATE FILED	DATE REPORTED	DATE FILED
TYPE (BKRPT)	TYPE (COLL)	TYPE (ST JD - SATISFIED JUDG); (JUDG-JUDGMENT)
COURT NUMBER	DATE ASSIGNED TO COLLECTION AGENCY	COURT NUMBER
CASE NUMBER	AGENCY ID NUMBER	AMOUNT
LIABILITIES	CREDIT GRANTOR NAME OR NUMBER	DEFENDANT
ASSETS	AMOUNT	CASE NUMBER
EXEMPT AMOUNT	DATE AND STATUS	PLAINTIFF
TYPE	BALANCE	DATE VERIFIED
	DLA - DATE OF LAST ACTIVITY ON ACCT.	STATUS
	ECOA DESIGNATOR - (I)NDIVIDUAL, (J)OINT, (S)HARED, (C)O-MAKER, (A)UTHORIZED USE, (U)NDESIGNATED, (M)AKER, ON (B)EHALF OF ANOTHER PERSON, (T)ERMINATED	DATE SATISFIED
	ACCOUNT SERIAL NO.

* FIRM/ID CODE
RPTD	DATE REPORTED
OPND	DATE OPENED
H/C	HIGH CREDIT OR CREDIT LIMIT
TRM	MONTHLY REPAYMENT AMOUNT OR NUMBER OF MONTHS OR YEARS
BAL	LAST REPORTED BALANCE
P/D	PAST DUE AMOUNT
CS	CURRENT STATUS OF ACCOUNT
	(I)NSTALLMENT; (O)PEN; (R)EVOLVING
	0 - TOO NEW TO RATE; APPROVED BUT NOT USED
	1 - PAYS WITHIN 30 DAYS, OR NOT OVER ONE MONTH PAST DUE
	2 TO 5 - TWO, THREE, FOUR OR FIVE MONTHS PAST DUE
	7 - PAYING UNDER DEBTOR'S PLAN
	8 - REPOSSESSION
	9 - BAD DEBT
MR	MONTHS RECEIVED
ECOA	(I)NDIVIDUAL, (J)OINT, (S)HARED, (C)O-MAKER, (A)UTHORIZED USE, (U)NDESIGNATED, (M)AKER, ON (B)EHALF OF ANOTHER PERSON, (T)ERMINATED
DLA	DATE OF LAST ACTIVITY ON ACCOUNT

Sample Credit Report

Date: 10/14/98 Time: 14:44:28 Operator: MLM

Department: Report Format: P Reference:

NM-JONES, MARK, A.

CA-2002, E US HIGHWAY 6, 61341, MARSEILLES, IL, 61341,,,

ES-TRAINMAN, B&O RAILROAD

ID-SSS-461-64-2761, BDS-12/01/60.

* 431 CSC NORTHERN ILLINOIS, PO BOX 664402,

, HOUSTON, TX, 77267-4402, 217/872-3799

*JONES, MARK, A SINCE 03/00/85 FAD 05/01/97 FN-316

2002, E US, HY RT 6, MARSEILLES, IL, 61341, TAPERPTD 08/97

BDS-12/01/1960, SSS-451-54-2761

01- ES-, ARMY

*SUM-07/90-09/98, PR/IO-NO, FB-NO, ACCTS: 2, HC$0-97375, 2 ONES

*INQS-CRDCO 502IZ22950 05/01/97

* FIRM/ID RPTD OPND H/C TRM BAL P/D CS MR ECOA ACCOUNT

CODE NUMBER

FMC *905 09/98 01/98 25K 422 22K I1 J AFA399L2

AUTO

MBNA *458 04/98 05/95 14K 0 R1 35 I

CREDITCARD

END OF REPORT EQUIFAX AND AFFILIATES - 10/14/98

Many credit reporting agencies exist. Graff Realty does not endorse any specific credit reporting agency.

Equifax Report Format
NM	NAME
CA	CURRENT ADDRESS
ES	EMPLOYMENT SUBJECT - POSITION, FIRM, LOCATION
SSS	SOCIAL SECURITY NUMBER
BDS	BIRTHDATE OR AGE