What’s The Difference Between A Credit Report and A Credit File?

“John, I see the terms credit report and credit file used all the time.  Aren’t they the same thing? And if they are the same thing, why are there two terms?”

Don’t feel bad if you don’t know the difference in the terminology. These two terms are also confused by those who are employed in the credit industry. They are often used interchangeably, but are not the same things.  It’s like credit report and credit score…used interchangeably but not the same thing.

File

A credit file contains the raw data that is compiled by the three major U.S. credit bureaus – Equifax, Experian and TransUnion. This information is supplied by companies such as banks, credit unions, credit card issuers, mortgage lenders, student loan lenders, auto finance companies, collection agencies, financial institutions, and companies that collect public records from courthouses.  The data builds from month to month to create a credit history.

The raw data includes the date the account was opened, the last date it was updated or paid, how much you owe, the amount of the loan, the amount paid, the credit limit on the credit card or the most charged on it, the status of how you currently pay the account – on time or late and by how many days. Open accounts stay on the credit file indefinitely. Negative information on open accounts is removed in seven to ten years.

It also includes that same information on closed accounts. The information stays on the credit file even after the accounts are closed.  Closed accounts with positive information are removed after ten years.  Closed accounts with negative information are removed after seven years.

The raw credit file is in “machine readable format” and has to be formatted so that it can be read by a lender or consumer.  The entire raw credit report is never sent to any company or individual, that information is considered proprietary.  Since the data is extremely sensitive and contain personal information such as social security number and account numbers, it is sent via secure networks and is password protected.

Report

When you apply for credit, the company requests your credit report, which compiled at that point out of the credit bureaus’ credit file database.  This is the so called credit inquiry. The inquiry includes the name of the company and date the company reviewed your credit report. Personal information includes your full name, present and former addresses, birth date, social security number, and present and former employers  Credit information includes account numbers, loans (auto, student and mortgage), credit cards (retail, oil and bankcard), charge cards (American Express and Diners Club), finance and collection accounts.  Public records include bankruptcies, tax liens, judgments and suits.