What is the difference between a credit file and a credit report?

Apr
1
2011

I’ve written about this before here but there still seems to be confusion so I figured it was a good idea to take another crack at the topic.  The terms “credit file” and “credit report” seem to be used interchangeably, but they are not the same thing in the credit reporting industry.  Basically, credit file is the raw data and credit report is the delivered and readable version.

Credit file

Credit files refer to the raw data in the credit file databases of the credit bureaus.  Their files are huge because they include information on well over 200 million U.S. consumers, collected from thousands of sources both currently and historically.  The information includes personal info, credit info, collection info, public records and inquiries. Accounts that are active and contain positive data can remain on the credit file forever. Negative data is removed in 7 to 10 years, depending on the item.

Raw credit file data is formatted so that it can be delivered to credit grantors and for credit score development such as FICO scores.   The entire file is never delivered to anyone, it is proprietary. Only certain credit data is provided to credit grantors electronically.  Since this is very sensitive information, it is delivered securely, pass word protected with account numbers masked. This data is not in report form and cannot be read by a person. Credit grantors combine the credit file data with other data and scores to evaluate applications.

Credit report

A credit report is the credit file formatted to be read by consumers and credit grantors.  There are different versions based upon the user.  Consumers receive explanation of industry terms, definitions, interpretation and advice of how to challenge items they feel are incorrect. Credit reports ordered by credit grantors are less detailed and have more “code”, which make them less meaningful to consumers.

There are many companies other than the three major credit report agencies (Equifax, Experian and TransUnion) that resell credit reports to consumers. Each company has formatted the credit report in their own way to explain the information and to be meaningful to consumers, such as the Smart Credit Report.  The service offered is not just the credit report, but consumer education.

John Ulzheimer is the President of Consumer Education at SmartCredit.com, the credit blogger for Mint.com, and a Contributor for the National Foundation for Credit Counseling.  He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry.

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