Lenders generally don't have the time to personally investigate credit histories. Instead, they rely on credit reports from the credit bureaus that collect and sell this information. The three major credit bureaus in the United States are Equifax, Experian and TransUnion.

A credit report is essentially a "report card" on how you have handled credit in the past and present. Credit reports contain four types of information: identifying information, credit information, public record information and inquiries.

Identifying information includes:

• your name
• your current and previous addresses
• your Social Security number
• your year of birth
• your current and previous employers
• if you're married, your spouse's name

Credit information includes credit accounts or loans you have with:

• banks, finance companies or credit unions
• retailers
• credit card issuers   
• other lenders

Public record information includes any information that's contained in state and county court records, such as:

• bankruptcies
• tax liens
• monetary judgments
• delinquent child support

Credit inquiries - These indicate to other lenders that you have applied for new credit (which could result in additional debt). Potential lenders may view multiple recent inquiries on your credit report as a sign that you may be overextending yourself.

Positive information stays on your credit bureau report indefinitely, although information about an account comes off after about seven years if no new information is added.

Negative information, such as late or inconsistent credit payments, will stay on your credit report for at least seven years, as does public record information such as tax liens and delinquent child support payments. Bankruptcies, foreclosures and judgments can stay on your credit report for up to 10 years, and information regarding a criminal conviction has no time limit.

Most inquiries stay on a credit report for up to two years.

Federal law and credit bureaus carefully regulate how credit reports can be used and by whom. Businesses must meet certain requirements before they can access consumer credit information.

These requirements usually include:

• proof of a permissible purpose under federal law
• a background check and on-site inspection of the business
• a current business license
• a signed contract requiring the business to use the data properly

It's a good idea to check your credit reports from time to time to make sure all information is accurate. Errors can, and do, occur. A good time to check your reports is before applying for a mortgage, auto or other loan. Correcting errors beforehand will make your loan application process much easier. If you have been denied credit and have not reviewed your credit reports, you should do so to make sure they are accurate. You are entitled to receive a free copy if you were denied credit.

By law, you have the right to obtain your credit reports at a reasonable price. You can receive a free copy of your report if you order it within 60 days of being turned down for credit. 

To order copies of your credit report, contact each of the three major credit bureaus:

Equifax
(800) 685-1111
P.O. Box 740241
Atlanta, GA 30374-0241

Experian
(888) 397-3742
P.O. Box 2002
Allen, TX 75013

TransUnion
(800) 888-4213
P.O. Box 1000
Chester, PA 19022