The study analyzed data from the largest reporting agencies and found that "credit card history dominates the information in credit reports."
The reporting agencies -- Equifax (EFX), Experian, and TransUnion -- each have more than 200 million files on customers, which are updated monthly. More than half of the updates come from credit card companies, with 40 percent of the information on credit furnished to the reporting agencies coming from bank, or general use, credit cards, and 18 percent from retail, or specialty store, credit cards. Mortgages and auto loans play a significantly smaller role, 7 percent and 4 percent, respectively.
Most of the information supplied to the credit reporting agencies (also called bureaus) is done by a handful of the largest banks and other financial institutions.
Have You Looked at Your Report Lately?
Credit reports -- and the credit score derived from the information in those reports -- are a critical part of consumers' financial lives, whether they're hoping to purchase a car, obtain a car loan, or even get approved for a cellphone plan. A person's creditworthiness determines how much credit they'll be granted, and at what interest rates.
However, the study found that fewer than 1 in 5 people obtain either free or paid copies of their credit report.
Frequent monitoring of credit reports can uncover errors that may be affecting your creditworthiness, as well as spot credit or identity theft fraud. Those who notice errors that possibly affect their credit rating can dispute them with the credit bureaus, or directly with the original bank, mortgage provider, or other lender that sent the agency the information.
The study found that nearly 32 million to 38 million disputes were filed in 2011, with nearly 40 percent of those disputes relating to debt collections. Most of the disputes filed with the credit reporting agencies are passed back to the original lender for resolution.
Consumers worried about potential identity theft can opt to freeze their credit reports, which will block new credit inquiries, by the consumer or anyone else, until the freeze is temporarily or permanently lifted. A credit freeze won't interrupt the regular use of banking accounts or credit cards. Laws governing credit report freezing are managed at the state level, and fees, often nominal, vary by state.
Motley Fool contributor Molly McCluskey writes about personal finance, investing and budget travel.