Most people have a credit report, but how many actually know what goes into it? If you listen to educators at the top three credit-reporting bureaus -- Experian, Equifax and TransUnion -- the answer is: not many.
"People don't understand what is actually included in their credit report," says Demitra Wilson, the director of media relations at Equifax. Consumers will stress over details that aren't even included and will get themselves into trouble over urban myths like the tale of the magically disappearing delinquency.
It's a problem, agree educators. Here are just seven of the most persistent myths that the top three credit bureaus say they hear all the time.
Myth No. 1: Your credit report includes your credit score
The truth: "Your credit report does not contain your credit score," says Wilson.
Consumers often think that when they pull a free copy of their report at AnnualCreditReport.com, they should also get a copy of their score, she says. However, if you want a copy of your FICO score, the credit score most widely used by lenders, you'll usually have to pay up to $19.95 (at myFICO.com) to get it. The exception is if you are denied a loan or given higher rates based on your credit score. In that case, a lender is required to send you a free copy of the score it used to make the decision.
You can also access a free credit score through a service such as CreditKarma.com. However, those scores aren't necessarily going to be the scores that lenders use. That's because "there are many different credit scores," says Rod Griffin, the director of public education at Experian, and the score that gets used depends on the lender and the type of loan it is handing out.
The good news is that even though you can't control the formulas that lenders use to calculate your many different credit scores, you can influence the information that goes into them. "You as a consumer have the ability to control the information in your report," says Griffin.
Myth No. 2: Intimate details, such as race, income or medical history, are included on your credit report
The truth: "Your credit report only includes information that's debt-related," says Griffin. It doesn't include your race or ethnicity, your income, your investments and assets or your criminal record, he adds. (It does, however, include your address, your Social Security number, your date of birth and possibly your place of employment.)
Some consumers also worry that late payments to their doctor's office will appear on their reports. However, that's false, says Griffin. "There's a law called HIPAA, the Health Insurance Portability and Accountability Act. It prohibits or regulates the sharing of medical information," he says. So credit-reporting bureaus are legally barred from including any information about your recent doctor's visits, the kind of treatment you received or the name of the health care provider that you visited.
That said, if you miss a payment on a medical bill, your health care provider may send that uncollected debt to a medical collection company, and the name of that company could appear on your personal credit report, says Griffin. Your lenders, however, won't see the medical company's name when they pull your report. They'll just see that you have a medical collection listed.
That's the confusing part, adds Griffin. Consumers often don't realize that what they see on their personal credit report isn't necessarily what a lender sees.
The same is true for soft inquiries, he says. A soft inquiry is listed when someone such as a credit card lender who's thinking about giving you a special deal or a potential employer asks to see your report. However, unlike hard inquiries (which occur when you apply for a new loan or credit and temporarily ding your credit score), soft inquiries aren't shared with lenders -- and don't affect your credit score -- because you haven't applied for any credit.
"We don't share soft inquiries with anyone but you, the consumer," says Griffin. "It's there so you know who's looked at that report."
Myth No. 3: Checking credit reports too often will hurt your credit score
The truth: "Viewing your own credit report has no impact on your credit score," says Cliff O'Neal, the senior director for corporate communications at TransUnion. "You could view your credit report every day, and it will have no impact."
However, if you give a lender permission to pull your credit report, that will affect your score, says Equifax's Wilson. "Where people get confused is if you actually go into a creditor or merchant, and you apply for a loan or apply for credit and you give them permission to access your credit report. That kind of inquiry is called a hard inquiry, and that kind of inquiry can impact your credit score," says Wilson.
Luckily, credit agencies will give you a break if you're shopping around at different dealers. "If you're shopping for a loan and are concerned that will hurt a score, know that we realize that you are shopping for a car or a mortgage or something of that nature," says O'Neal. If the credit bureau sees that your report has been pulled multiple times within a 30-day period, it will group those inquiries together and count them as just one hard inquiry.
More from CreditCards.com:
