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Chapter 4: Credit Reports and Credit Bureaus

 A credit report is like a report card for your credit history, and credit bureaus are the companies that collect and maintain this information.  

There are three credit  bureaus. Experian Equifax and TransUnion.


What is a credit report? 

It's a detailed summary of your credit history, including your credit accounts, payment history, and outstanding balances. 

I use Credit Karma to get my Free Credit Reports. 

It is really easy to sign up.  They present the sections of my credit score clearly.  

I get into my Credit Karma account about once a week.  It is easy quick and it will tell me if anything has changed. 

I take a quick look at all of my account balances and check if any new accounts were opened -- If I did not open a new loan account and one shows up would mean someone has hacked my identity.  We will talk more about Identity theft in Chapter 9.


My Changing Credit Score

I have watched my score change with changes in my situation and credit card balances.  I spent a lot of money on my cards for the business I used to own.  The changes in balances on  a credit card can make a significant change in my score.  Even with my overall credit card usage under 15% if one of my cards is at 70% it will bring down my score by 25-40 points.  

Update My Credit Report March 2023. 

I recently spent $8,500 on one of my credit cards which has a $15,000 credit limit.  I will pay it off when the payment is due.  However this spending hit my credit report and it knocked my credit score down by 28 points.  Expect your score to change as your statement balances change.


Four weeks later.  The payment went through and my credit score jumped right back up by 28 points to 822.

What is a Good Credit Report/Score?

The Credit Scoring is usually done on a scale from 300 to 850.  

The average credit score in the United States is usually around 700.   

  • 300-579: Poor.

  • 580-669: Fair.

  • 670-739: Good.

  • 740-799: Very good.

  • 800-850: Excellent.

It will take an excellent credit history that has multiple lenders over six or seven years to get over an 800 credit score. 

However in just a couple of years if you develop a clean credit history with a couple of different credit sources you can easily get well over a 700 credit score.

How I check my Credit Score

I regularly use Credit Karma to check my Credit Report rather than going direct to the credit bureaus.  I check my score at least monthly if not weekly. Credit Karma is Free to use and will acquire the credit reports from Transunion and Equifax.  Credit Karma uses the Vantage 3.0 credit scoring system which is close to the same as the FICO credit scoring.

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