How Credit Reports Are Determined

For more than five years Think Credit Reports has been providing premium account holders with quarterly credit scores included at no additional charge. Think Credit Reports customers are given access to credit information from all three major credit data bureaus.

An individual’s credit score is determined by calculating numbers in several major areas. First, more than one third of a credit score is based on payment history, including how frequently a person becomes delinquent on an account. Nearly equal in importance to payment history is the total amount owed; while excessive debt will negatively affect a score, having a number of active credit accounts, however, is not necessarily a bad thing. Additionally, the length of time an individual has been building credit is important, including when a person’s oldest and newest credit accounts were opened. Finally, the types of credit in use and the rate at which a person opens new credit accounts each represent 10% of an individual’s credit score.


How and Why a Credit Bureau Collects Information

Based in Valencia, California, Think Credit Reports provides customers with data from all three major credit bureaus. Think Credit Reports has interacted with these credit bureaus for more than five years.

As independent organizations, credit bureaus work to collect and dispense information that supports responsible lending. The credit bureaus obtain purchase, borrowing, and repayment information about consumers from data reports that subscribers submit on client accounts. This information tells the credit bureaus about any defaulted or late payments, accounts in arrears, and accounts in good standing.

Credit bureaus offer their services to a broad range of financing entities, including credit card companies and mortgage lenders. When a lender wishes to know about a particular individual’s credit history, one or more credit bureaus collect this data and offer it in the form of a credit report. The lender can then make more informed decisions about whether a borrower is likely to make on-time payments based on their past behavior. If the lender approves the borrower’s application for credit, information about the account then becomes part of the individual’s future reports.

Three Myths About Credit Reports

A credit data provider, Think Credit Reports is a website that offers consumers the convenience of ordering their reports online. Operating from Valencia, California, Think Credit Reports works with all three bureaus to provide credit monitoring and educate consumers about their reports.

While some believe that paying off debts is a sign of good credit, a credit report is actually a reflection of an individual’s entire payment history. Making timely payments over time establishes good credit and is the main measurement metric. Regardless of whether a debt is paid in full, late and missed payments will continue to factor into the overall credit score and remain on a report.

In addition, closing or canceling a credit card does not boost a person’s credit standing. In fact, having multiple credit lines open reveals a person’s ability to manage debt. Conversely, opening up several credit cards at once does reflect negatively on a credit report.

Lastly, checking a personal credit report does not lower an individual’s score. This is known as a soft pull, and individuals and credit counselors can obtain a report to check credit standing without being penalized. However, hard pulls initiated by retailers and other merchants seeking to issue a line of credit do harm a person’s credit score.