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What Is a Credit Report & What Is on It?

What Is a Credit Report and What Is on It?

Learn what a credit report is at Equifax! Read about each consumer reporting agency, see how to get a credit report, understand what is on a credit report and much more! [Duration - 2:16]

Highlights:

Your credit reports are important pieces of financial information that help lenders measure your level of credit risk, or the likelihood you’ll pay your bills on time.
Your credit reports include information about the types of credit accounts you’ve had, your payment history and certain other information such as your credit limits.
Credit reports from the three nationwide consumer reporting agencies — Equifax, TransUnion and Experian — may contain different account information.

Your credit reports are important pieces of financial information that help lenders measure your level of credit risk, or the likelihood you’ll pay your bills on time. So, it's important to understand what a credit report is, as well as what you’d expect to find on one.

What is a credit report?

A credit report is a summary of your credit history, including the types of credit accounts you’ve had, your payment history and certain other information such as your credit limits.

Information in your credit reports is typically provided to the three nationwide consumer reporting agencies (CRAs) — Equifax, TransUnion and Experian — by your creditors. You may see differences in your credit reports depending on which CRA provides them. This is because not all lenders report information to all three CRAs. Some report only to one or two, or even to none at all.

How is your credit report used?

Lenders use your credit reports as part of their evaluation process when deciding whether to extend you credit — and at what terms. Additionally, the information on your credit report is used to calculate your credit scores.

Prospective employers and landlords may also access your credit reports to help them decide whether to offer you a job or a lease. Your credit reports may also be reviewed if you’re trying to secure insurance coverage or if you’re applying for services such as utilities or a mobile phone contract.

What is in an Equifax credit report?

Your Equifax credit report contains the following types of information:

Identifying information: This section of your Equifax credit report, which is not used to calculate your credit scores, includes personal information, such as your name, address, Social Security number and date of birth.
Credit account information: This information is reported to Equifax by your creditors and includes the types of accounts (for example, a credit card, mortgage, student loan or vehicle loan), the date those accounts were opened, your credit limit or loan amount, account balances and your payment history. Under certain circumstances, it may not contain all your credit accounts, such as a closed account that has dropped off your report after a certain period of time, or an account not reported to Equifax by one of your creditors.
Inquiry information: There are two types of inquiries: “soft” and “hard.” “Soft” inquiries may result from checking your own credit reports, companies extending you pre-approved offers of credit or insurance, or your current creditors conducting periodic account reviews. Because soft inquiries do not impact credit scores, regularly checking your credit reports is a low-risk way to monitor your credit accounts and help you identify inaccurate or incomplete information, or suspicious activity that may signal potential identity theft. “Hard” inquiries occur when companies or individuals, such as a credit card company or lender, review your credit reports because you have applied for credit or a service – for example, a new loan, a credit card or a mobile phone contract. Hard inquiries remain on your credit reports for up to two years, and may impact your credit scores. Hard inquiries are just one of the factors that determine your credit scores.
Bankruptcies: Bankruptcies generally remain on your credit report for seven to 10 years, depending on the type of bankruptcy. A Chapter 7 bankruptcy is visible on your credit report for up to 10 years, and Chapter 13 for up to seven years.
Unpaid child support and alimony: It’s also possible for unpaid child support or alimony payments to end up on your credit report and remain there for up to seven years, even if the account is later paid in full. While paying the account will not remove it from your credit report, it may lessen the impact that the previously overdue account has on your credit score.
Collections accounts: The type of accounts that can be turned over to a collection agency are credit accounts, and also accounts with banks, retail stores, cable companies, mobile phone providers, doctors and hospitals. Effective July 1, 2022, medical debt that was sent to a collection agency but you have since paid off will no longer appear on your Equifax, Experian or TransUnion credit reports. Also, a landlord may seek payment by selling your rent debt to a collection agency. The unpaid rent sold to a collection agency can be included in your credit report for up to seven years.

How to get a credit report

It's important to check your credit reports regularly to ensure the information in them is accurate and complete . It’s also wise to monitor your credit scores.

You can receive free Equifax credit reports with a myEquifax account . Sign up and look for "Equifax Credit Report" on your myEquifax dashboard. For a free monthly VantageScore 3.0 credit score, click "Get my free credit score" on your myEquifax dashboard to enroll in Equifax Core Credit™ . A VantageScore is one of many types of credit scores. You can also get free credit reports annually from the three nationwide CRAs at AnnualCreditReport.com.

Get your free credit score today!

We get it, credit scores are important. A monthly free credit score & Equifax credit report are available with Equifax Core Credit TM . No credit card required.

All about credit reports

What is a credit report.

When you make a payment on a credit card or loan, the business that gave you the loan or credit keeps a record of how much and often you pay, as well as the credit limits and loan balances. Those businesses and other sources may report your credit, loan and payment history to one or more credit reporting companies. The credit reporting companies each combine the information they receive about your different credit, loan and payment activities into a credit report. The credit reporting companies prepare credit reports for people in the U.S. Since not all businesses report to all three credit reporting companies, the information on your credit reports may vary.

A credit report is an organized list of the information related to your credit activity. Credit reports may include:

A list of businesses that have given you credit or loans
The total amount for each loan or credit limit for each credit card
How often you paid your credit or loans on time, and the amount you paid
Any missed or late payments as well as bad debts

Credit reports may also include:

A list of businesses that have obtained your report within a certain time period
Your current and former names, address(es) and/or employers
Any bankruptcies or other public record information

Under Federal law, you are entitled to receive one free copy of your credit report from each credit reporting company every 12 months. For more information visit the Consumer Financial Protection Bureau's website .

What is a credit score?

Credit scores are the result of mathematical formulas that use the information in your credit report to calculate a value which suggests how likely you are to pay your bills in the future.

The credit scores you get from different companies will not be the same. There are a number of reasons for that:

There are many different formulas used to calculate credit scores. The differences in the formulas may lead to differences in your credit scores.
Companies may produce scores that give results on different scales.
Businesses don't always report to every credit reporting company, and even when they do, they may send their information on different days. This means that on any given day, the information that one credit reporting company has may differ from the credit activity being reported to another credit reporting company.

Businesses use credit scores to estimate how likely you are to pay back loans or services. People with higher credit scores may be more likely to pay back their debts. People with lower credit scores may be less likely to pay their debts. The Consumer Financial Protection Bureau's website has additional information on credit scores .

Why don't my free credit reports include credit scores?

Your credit report and your credit score are not the same thing. Your credit report contains information that a credit reporting company has received about you. Your credit score is calculated by plugging the information in your credit report into a credit score formula. You may have multiple credit scores based upon who provided the score, and whether the company providing the score used their own scoring model or used a model available from a third party.

Federal law gives you the right to ask for a copy of your credit report from each nationwide credit reporting company every year for free. However, the law does not require the credit reporting companies to provide a free credit score.

The Consumer Financial Protection Bureau's website has additional information on why free credit reports do not include credit scores .

What makes my credit score go up or down?

A credit score is based on information in your credit report. Some factors include how much money you owe, how long you've owed it, how many new accounts you have, how often you miss or are late with payments, and what type of credit accounts you have. Changes in any of those factors may cause a score to go up or down.

The Consumer Financial Protection Bureau's website has additional information on factors that can affect your credit score and how you can maintain a good credit score .

For more information about how to improve your credit please visit the Federal Trade Commission's website .

How is my credit report affected when my spouse dies?

Nothing on your credit report should change when your spouse dies. To confirm that nothing has changed, you should obtain a copy of your credit report to review it for accuracy.

How should I report that someone has died?

When someone dies, a family member or an appropriate person such as an executor should send a notice letter to one of the three credit reporting companies and request that they update the credit record to indicate that the person is deceased. The credit reporting company will then share that information with the other two credit reporting companies so that they can update their records.

The letter should include the following information about the deceased:

Social Security Number
Date of birth
Date of death
Last known address
A copy of the death certificate or letters testamentary

The letter should also include information about the spouse or executor, including:

Their full name
Address for sending final confirmation

You may submit the notice letter to any of the credit reporting companies by mail:

P.O. Box 105139
Atlanta, GA 30348-5139
P.O. Box 2002
Allen, TX 75013
P.O. Box 2000
Chester, PA 19016
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Learn about your credit report and how to get a copy

Credit reports list a history of your finances. Learn how to request credit reports, what information they include, and how lenders and other organizations may use them.

How to get a copy of your credit report

By law, you can get a free credit report each year from the three credit reporting agencies (CRAs). These agencies include Equifax, Experian, and TransUnion.

AnnualCreditReport.com is the only website authorized by the federal government to issue free, annual credit reports from the three CRAs. You may request your reports:

Online by visiting AnnualCreditReport.com
By calling 1-877-322-8228 (TTY: 1-800-821-7232)
Annual Credit Report Request Service PO Box 105281 Atlanta, GA 30348-5281

What information is on your credit report

Credit reports show your personal financial information, including:

Bill payment history
Current debt
Bankruptcy history
Lawsuit records

In most cases, your credit report will not include your credit score .

Find out how to get your credit score .

Who uses credit reports and why

Credit bureaus can sell the information on your credit report to:

Potential employers
Insurance companies
Rental property owners

These businesses may use the information on your credit report to decide if you qualify for:

Rental property leases

What to do if your request for a copy of your credit report is denied

If a CRA denied your request for a credit report, contact them first to resolve the issue. If you cannot get your complaint resolved, contact the Consumer Financial Protection Bureau (CFPB) .

LAST UPDATED: March 26, 2024

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How to Read Your Credit Report

Four steps you can take to make sure your credit report is accurate, sharing is nice.

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Lawmakers met Tuesday to put pressure on credit reporting agencies and explore ways to improve credit reporting so that it is more accurate and fair.

Representative Maxine Waters, the House Financial Services Committee chairwoman who held the hearing, presented a nearly 200-page proposal for a new bill intended to reduce the number of errors in credit reports and limit the amount of time negative information can remain in a consumer's credit file.

Mistakes, which are common, can prevent consumers from getting a loan or a credit card, and can cause you to pay more for insurance.

According to the National Consumer Law Center, 42 million Americans have errors in their credit reports. For 10 million, the mistakes are so significant they could be denied credit.

To learn more about the hearing, read our story, Proposed Bill Seeks to Reduce Credit Report Errors .

Until such a bill becomes law, Bruce McClary, spokesman for the National Foundation for Credit Counseling, says that consumers can be proactive about fixing errors. He says you should get copies of your credit reports from each of the major credit bureaus— Equifax , Experian , and TransUnion —and you should review them at least annually.

Once you have the report, though, figuring out what to look for—and deciphering descriptions—can be downright confusing.

Here's what you should closely examine.

Identifying Information Look carefully at the top of your credit report—what industry folks call the header—to make sure it correctly identifies who you are. This includes your name, current and past addresses, and possibly current and past employers.

Glaring errors—a totally wrong address, for example, could be a sign of identity theft or an indication that a credit bureau has mixed your file with that of another person, says Thomas Nitzsche, a credit educator at Money Management International, a nonprofit credit counseling organization.

Minor mistakes are probably harmless but still worth correcting, McClary says. The reason: When you go to pull your reports, credit bureaus ask questions to verify your identity. The correct answers are culled from your credit report, so if the information is inaccurate, you might be blocked in the future from accessing your reports.

What to do: If you see mistakes in the header of your credit report, file a dispute with the credit bureau, McClary says. The Consumer Financial Protection Bureau lists how to submit disputes with each of the major credit bureaus, Equifax, Experian, and TransUnion.

Credit Card Accounts and Loans For each account you have, you'll see multiple fields of data, including the type of credit listed. You'll see whether it's a car loan, for example, or a revolving account such as a credit card. Also listed will be your name as well as any other names listed on the account, the total amount owed, the credit limit provided to you, and the status of the account—whether it's open or closed. The report will also list the monthly payment owed, and a month-by-month record of whether you paid on time or if the account was overdue by 30, 60, or 90 days, or more.

What to do: Look carefully at the creditor names on your report. Sometimes the names listed may not seem to correspond to any credit cards or loans you have. That can happen if one lender bought another, say, or you didn't directly interact with a card issuer—such as when you sign up for a credit card in a store, Nitzsche says.

"It can be a game of process of elimination," he says. Other information provided, like the date the account was opened, might offer clues, Nitzsche says.

Also, look out for duplicate accounts—they can make you appear overleveraged to a potential lender. Keep in mind, though, that duplicates may be legitimate, such as when you refinance a loan or close and then immediately reopen a credit card after it's stolen. "You have to look closely to make sure it's not an error," McClary says. Only one of the accounts should be marked as active. If you're not sure whether the second account is a mistake, get in touch with the creditor to clarify.

If any of the information is inaccurate, especially the record of on-time payment, file a dispute with both the credit bureau and the creditor, McClary says. Correcting any mistakes with the creditor is important so that the creditor doesn't continue sending wrong information to the credit bureaus.

The CFPB lists how to submit disputes for each of the major credit bureaus, Equifax, Experian, and TransUnion. Also, correct any mistakes with the creditor just in case it is sending wrong information to the credit bureaus.

Accounts in Collection and Public Records Accounts that are so far past due that they've wound up in debt collection appear in their own section on credit reports, as do money-related public records items, such as foreclosure, bankruptcy, and tax liens.

Debt collection accounts can be particularly tough to decipher because they are routinely bought and sold and you may have never heard of the company listed on your report. They are also important to verify as correct because mistakes can be made as accounts are passed from one company to another, McClary says.

Overdue bills can also wind up in debt collection, which many people aren't expecting to see. Nitzsche says that in his experience, unrecognized collections items are often medical bills that people thought were covered by insurance. Other sources might be subscriptions you thought you had canceled or bills you inadvertently missed, perhaps because you moved.

What to do: If you don't recognize an account, contact the debt collector and ask for the name of the original creditor. There may be a phone number listed on the credit report. You can then ask the creditor to send you a " validation notice "—a written notice that gives you backup to prove the debt is yours, Nitzsche says.

If you have a public records item, make sure the status of the court judgment is accurate, McClary says. For instance, if you have repaid owed money as part of a court judgment, that should be clear on your credit report, even though the entry itself won't immediately go away.

Inquiries This section will be at the end of your report and includes a list of companies that have recently looked at your credit report. These may be lenders deciding whether to loan you money, but they could also be other organizations, including insurance companies, background-check outfits (acting on behalf of potential employers), utility companies, and cell-phone carriers.

"Inquiries can often be the first tip-off that someone is trying to use your identity to open accounts," McClary says.

What to do: If you see inquiries from lenders that don't look correct to you, alert the credit bureau and put a freeze on your report, if you haven't already. That will prevent identity thieves from opening new accounts in your name.

Also get in touch with the creditor. There may be a phone number for doing so on your credit report.

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What is high credit on a credit report?

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Your credit score may seem like a mysterious number plucked from thin air, but that’s only because such a wide range of factors come into play. FICO scores, for example, take five different categories into account , including payment history, new credit and credit mix, the age of your credit and the amount you owe in relation to your credit limits.

When you consider all the details and how they change over time, it’s no wonder credit scores are confusing and unpredictable.

But some factors are a lot more important than others. According to myFICO.com, your payment history is the most important factor making up your credit score , accounting for 35 percent of your final score. Next up is how much you owe in relation to your credit limits, also known as credit utilization. This factor makes up another 30 percent of your score.

But how you handle your credit now isn’t the only factor that determines your score. Sometimes even utilization from the past can come back to haunt you. This is the case with “high credit.”

What is high credit?

High credit may also be called “high balance” or “original amount.” This figure is the highest monthly balance or highest amount of credit you have owed on a specific credit card account or loan during a particular period of time as determined by the bank.

Banks and credit card issuers often determine high credit using their own set of criteria. When it comes to credit cards, high credit may be the highest balance you’ve carried on your credit card over the last 12, 24 or 36 months. With auto loans, personal loans and other non-revolving accounts, the high credit amount is the original amount you borrowed on your loan.

Unlike credit utilization, high credit has no impact on your credit score. Let’s take a look at why.

How does high credit affect your credit score?

In many cases, high credit doesn’t come into play. For the most part, the highest balance you’ve had on a credit card is only considered when your credit limit is left off your credit report. In that case, your high credit amount will be reported as your credit limit using the FICO scoring method . And that’s where things get messy.

Imagine for a moment you have a credit card with a $20,000 limit, which you used to pay for $4,000 in new home appliances several months ago. You’ve been able to pay off $1,000 of the balance since then, but you still owe $3,000. If your high credit amount of $4,000 were listed on your credit report as your credit limit, your current utilization on this credit card would be 75 percent using the following formula:

Current credit card balance / high credit = utilization

This is far from reality since your utilization would be significantly lower if your actual credit limit ($20,000) were being considered. In that case, your utilization would only be 15 percent.

Credit reporting agency Experian recommends you should strive to keep your utilization on individual accounts below 25 to 30 percent. So it’s no surprise that high credit could damage a credit score in the scenario above. Experian also notes that consumers with the best credit scores keep their utilization below 10 percent in most cases, so that’s something to keep in mind.

How does it affect credit utilization?

A high balance does not directly impact your credit score, but it can affect your credit utilization.

Credit utilization is the amount of available credit you’re currently using in comparison to your credit limit—both on an individual card and multiple cards combined. It makes up 30 percent of your credit score. So, a high credit utilization ratio would also mean a low credit score. This figure tells lenders whether or not you are someone who pays their bills on time. If you have a high credit utilization ratio, lenders may see you as a liability.

A high balance, or high credit, is different than high credit utilization. This is the highest amount of money you have ever charged to a given card, and it does not carry weight as far as your VantageScore or FICO score is concerned. However, when you have a high balance that occupies more than 30 percent of your credit limit and you fail to pay it off, your credit utilization is going to go up and your credit score is going to take a hit.

Now, let’s say you have a credit card with a $5,000 credit limit and you charge $5,000 to it, but immediately pay it off before the statement closing date. Your credit utilization in this scenario is 0 percent, but your high balance is $5,000.

Alternatively, let’s say you charge $2,000 over the course of one month to a card with a $5,000 credit limit. At the end of the billing cycle, you will have a balance of $2,000 on a card with a $5,000 limit. That translates to a 40 percent credit utilization, 10 percent over the recommended amount.

Lenders can tell by looking at your credit utilization and high balance what kind of spender you are. Do you spend big and pay your bills on time? Or, are you a messy spender with bills that rack up over time?

It is always a good idea to keep your available credits as low as possible. Running high balances on your credit card can raise your credit utilization ratio while raising your credit score.

Is it worth keeping track of your highest balance?

The more you know about your personal finances, the more prepared you will be to deal with them. Meaning, if you lose track of your spending and find yourself with a $5,000 charge you aren’t sure how you’re going to pay off, your credit score is going to suffer.

On the flip side, if you aren’t a big spender and only occasionally use your credit card, you may not notice when an unauthorized charge is posted at the end of the month. If you don’t use your credit card often, continue to check your statement frequently to make sure there isn’t any unusual activity.

It doesn’t hurt to keep an eye on your finances and high balances, simply to keep things from getting out of hand.

What to do about high credit on your report

If you suspect high credit might be damaging your credit score, there’s one way to find out. Head to AnnualCreditReport.com and get a copy of your credit reports from all three credit bureaus —Experian, Equifax, and TransUnion—for free. From there, you can check if your high credit amount is being reported for accounts in question, or if your actual credit limit is being reflected as it should be.

If you’re not sure which is being used, you can learn more about how to read a credit report . And if you do find credit limits incorrectly reported on any of your credit reports, you should take immediate steps to dispute those errors with the credit bureaus to stop them from negatively impacting your credit score.

If you are simply struggling to pay off a high balance due to high interest rates, for example, there are a few options worth considering in order to take control over your debt:

Get on top of your monthly payments: This is easier said than done, but if you can manage to pay more than the minimum payment , you will have an easier time paying off a credit card that may charge high interest. When you only pay the minimum payment each month, compounding interest can make small minimum payments seem like they occur in a never-ending cycle.
Consider a balance transfer: A balance transfer credit card is a solid option when faced with a high balance and high interest rates. With a balance transfer card, you can move over a balance to a card with an introductory 0 percent APR offer. This allows you to manage and pay off your debt easier while taking advantage of no interest charges for a predetermined period of time set by the issuer. Some of the best balance transfer credit cards have introductory 0 percent APR offers lasting 12 to 21 months.
Use cash or debit while paying off your credit card: If you have racked up a significant balance on your credit card, it is time to stop adding to the balance before you find yourself in even more debt you can’t pay off. Try to use only debit or cash until you can pay down your credit card balance.

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What Do the Abbreviations on My Credit Report Mean?

They might look like alphabet soup, but they’re important

What Is a Credit Report and How Do I Access It?

1FBUSA: 1st Financial Bank USA

C or cls: closed, c or f: collection, c1: line of credit, paid as agreed, cls: credit line secured, co: charge-off, d: defaulted on contract, del: delinquency, dla: date of last activity, ecoa: equal credit opportunity act, efx or ef: equifax, fcra: fair credit reporting act, fp: personal loan company, gecrb jcp: ge capital retail bank, i9: installment loan, charged-off.

KD: Key Derogatory

M: Mortgage Loan

M: manually frozen, m: primary borrower with a co-signer, m: medical and related health, m1: mortgage, paid as agreed.

MACYSDSNB: Macy's Department Store National Bank

MOP: Manner of Payment

Nd: no data, o: oil company, o: open account, r: repossession, r: reported, r1: revolving account, paid as agreed, tuc or tu: transunion, volusurr or vs: voluntary surrender, wfds: wells fargo dealer service, xpn or xp: experian.

Satoshi-K / Getty Images

Checking your credit report regularly is important so that you know it includes the right information—and nothing else. As you're reading through your credit report, though, you may notice an alphabet soup of abbreviations that can make it feel like you're reading another language or a secret code.

These abbreviations are typically shortened creditor names, industry acronyms, account types, and statuses. Becoming familiar with some of the most common credit report abbreviations can help you determine whether you need to take action to correct errors.

What Is a Credit Report and How Do I Access Mine?

Institutions that have issued you credit cards and loans send regular updates about your accounts to credit bureaus , also known as credit reporting agencies. Credit bureaus collect all the data and combine it into a single file, known as your credit report. When you apply for new credit, the financial institution pulls your credit report to determine whether you meet the qualifications.

To quickly figure out the likelihood that you'll repay a loan on time, creditors may instead use your credit score , a three-digit numerical summary of your credit report information at a given point in time.

It's important to check your credit report periodically to make sure the information it contains is accurate, complete, and within the allowed reporting time limit. You can access your credit report online from any of the credit bureaus, but there may be a fee. You're also entitled to a free credit report each year from the major credit bureaus.

You can get one free credit report per week from Equifax, TransUnion, and Experian through December 2023 at AnnualCreditReport.com.

As you read through your credit report, reference this guide to better understand some of the abbreviations you see. Different credit bureaus and credit report providers may use slightly different codes, and some codes may only appear on the reports issued to lenders. We’ll clarify as much as possible.

1st Financial Bank USA provides credit cards and loans. This code may appear on your credit report if you have or had a credit or loan product from this bank.

This code indicates an account that is no longer open for new activity. Experian uses the status “CLS,” while TransUnion uses “C.”

“Collection” indicates an account that has been placed with a third-party collection agency for further collection efforts. TransUnion also uses the code “F” when an asset has been repossessed by the lender.

C1 indicates a line of credit that has been paid as agreed. The "C" is an abbreviation for a line of credit and the "1" indicates the manner of payment, paid according to the agreement.

When it appears in the "Purpose Type of Account" area of your Experian credit report, this code stands for “credit line secured.”

A charge-off code indicates an account was more than 180 days past due, was written off as a loss, and is closed to future purchases. It can hurt your credit , so it’s a good idea to take steps to remedy the situation.

This status indicates you did not fulfill the requirements of the contract, such as falling behind on payments.

Indicates a delinquency , or an account that is past due by 30 or more days. DEL may be followed by 30, 60, 90, or 120+ to indicate the number of days past due. This code may less commonly appear as DELINQ.

This is the date of the most recent activity on your account, such as a payment or purchase. It may occasionally appear as “LACT,” or “last activity.”

ECOA stands for Equal Credit Opportunity Act. The law requires that businesses report accounts shared by spouses to the credit bureaus when spouses' names are on the contract or when the business has received a written request from one of the spouses.

ECOA will appear as a column header and will be followed by codes indicating who is responsible for repaying each account.

For shared accounts, the abbreviation or numeral in the WHOSE column shows who an account belongs to.

Abbreviation for Equifax, one of the three major credit bureaus.

The Fair Credit Reporting Act is the law that defines your rights as well as the responsibilities of credit reporting agencies and businesses that provide information to the credit bureaus.

This is a kind of business code that indicates a personal loan company.

GE Capital Retail Bank is the former issuer of the JCPenney credit card. The bank changed its name to Synchrony Bank on June 2, 2014. This code may appear on your credit report if you had or were an authorized user on a JCPenney store credit card.

This status indicates an installment loan was charged off as debt. The "I" is an abbreviation indicating an installment account and the "9" indicates the manner of payment (in this case, a charge-off).

KD: Key Derogatory

This term appears on some credit reports to indicate a serious delinquency, like a charge-off, collection, foreclosure, or repossession.

A type of loan that's used to purchase a home or borrow from the value of a home you already own.

On a TransUnion credit report, an M near the verified date indicates the account was manually frozen.

On a TransUnion credit report, an M in the ECOA section indicates a primary borrower on a co-signed account. See also “ECOA.”

Yes, “M” can mean a lot of things on a credit report. On a TransUnion credit report, an M near the information furnisher's name indicates the business is in the medical and related health fields.

Indicates a mortgage that has been paid as agreed in your loan terms. The "M" is an abbreviation indicating a mortgage account and the "1" indicates the manner of payment.

MACYSDSNB: Macy's Department Store National Bank

Department Store National Bank is the issuer of the Macy's Credit Card. This code will appear on your credit report if you had or were an authorized user on a Macy's store credit card.

MOP, or manner of payment, describes the current payment status on the account. For example, it might say, “pays as agreed” or “pays 120 days or more past the due date.”

This abbreviation indicates there is no data for that specific time period. Some credit bureaus may indicate this lack of data using a hyphen (“-”).

On a TransUnion credit report, an O near the information furnisher's name indicates the business is an oil company.

This code indicates an account that's active and available for use.

Repossession is when the lender takes possession of your vehicle (or other property) after you have defaulted on loan payments. Experian uses the code “R” for repossessions, while TransUnion uses “F.”

Used near the date on a TransUnion credit report, “R” indicates that the information was reported to the credit bureau.

R1 indicates a revolving or option account that is paid as agreed. The "R" is an abbreviation for a revolving account and the "1" indicates the manner of payment.

Abbreviation for TransUnion, one of the three major credit bureaus.

On an Experian credit report, this code indicates you voluntarily gave your vehicle back to the lender because you could no longer make payments.

Wells Fargo Dealer Service was an auto-lending arm of Wells Fargo. This code may appear on your credit report if you had an auto loan through Wells Fargo.

Abbreviation for Experian, one of the three major credit bureaus.

PRNewswire. " Equifax, Experian and TransUnion Extend Free Weekly Credit Reports in the U.S. Through 2023 ."

TransUnion. " Credit Report Quick Reference Guide ."

Experian. " Understanding Your Experian Credit Report ," See "Payment History."

Experian. " Glossary of Account Conditions and Payment Status ."

Equifax. " Consumer Credit Report User Guide ," See #35.

Consumer Financial Protection Bureau. " Equal Credit Opportunity Act (ECOA) ," Page 9.

Kreyòl Ayisyen

CFPB Finds Violations of Credit Report Accuracy Requirements, Including for Survivors of Human Trafficking

Examiners also found furnishers failed to correct false information and reported fraudulent information

WASHINGTON, D.C. – The Consumer Financial Protection Bureau (CFPB) today published an edition of Supervisory Highlights to share key findings from recent examinations about continuing accuracy problems in the credit reporting system. The CFPB found consumer reporting companies failed to ensure the accuracy of credit reports, including by failing to exclude information resulting from alleged identity theft or human trafficking. The CFPB also found furnishers – companies that provide information to consumer reporting companies – failed to correct false or fraudulent information sent to consumer reporting companies.

“Survivors of human trafficking and victims of identity theft have the right to block information improperly placed on their credit report,” said CFPB Director Rohit Chopra. “We will be taking additional steps to ensure that companies correct false and inaccurate information on credit reports.”

Consumer reporting companies and furnishers play a crucial role in ensuring the accuracy and integrity of information contained in credit reports. Inaccurate or false information can infect credit reports because of reporting failures by consumer reporting companies or by those who furnish information, including banks, loan servicers, and debt collectors. Inaccurate or false information can also end up on credit reports when consumer reporting companies and furnishers do not follow their dispute resolution obligations or their obligations relating to identity theft and human trafficking.

The CFPB continues to prioritize examinations of consumer reporting companies and furnishers. CFPB examiners have found failures by these companies to follow a rule implemented in June 2022 to help survivors mitigate the financial consequences of human trafficking. The rule requires credit reporting companies to block, from credit reports, adverse information that resulted from human trafficking. Specifically, today’s edition of Supervisory Highlights found:

Consumer reporting companies failed to block or remove information related to identity theft and human trafficking: Examiners found that companies refused to honor consumer requests to block information associated with identity theft based on overbroad criteria; failed to inform consumers when blocks were denied or rescinded; failed to provide victims of identity theft with summaries of rights; and failed to timely block all information resulting from human trafficking identified by consumers.
Consumer reporting companies accepted information from unreliable furnishers: Examiners found companies accepted information from furnishers that may have been no longer providing reliable, verifiable information about consumers. For example, consumer reporting companies continued to include information from furnishers that failed to respond to all or nearly all disputes or that issued the same responses to all disputes.
Furnishers provided information to consumer reporting companies they knew was false: Examiners found that auto loan furnishers continued to share incomplete or inaccurate information for several months or even years after learning the information was false, incomplete, or inaccurate. In other instances, furnishers provided information even after they determined the information was fraudulent or due to identity theft.
Furnishers did not follow requirements for dispute investigations and identity theft: Examiners found that some furnishers continued to furnish information that consumers were disputing without indicating the information was in dispute. In other instances, furnishers failed to conduct investigations into the accuracy of information consumers disputed.

In response to the CFPB’s findings, the involved consumer reporting companies and furnishers are taking corrective actions. For example, CFPB examiners directed consumer reporting companies to revise their compliance processes to ensure that they process all human trafficking block requests per the law. In other instances, furnishers conducted lookbacks to ensure they deleted all accounts they determined to be opened fraudulently.

In addition to its supervision work, the CFPB has taken regulatory and enforcement actions to strengthen the consumer reporting and furnishing systems. The CFPB launched a rulemaking to remove many types of medical debt from credit reports. The CFPB also issued advisory opinions to address inaccurate background check reports and sloppy credit file sharing practices.

In November 2023, the CFPB ordered Toyota Motor Credit to pay $60 million for illegal lending and credit reporting misconduct. In October 2023, the CFPB and Federal Trade Commission took actions against TransUnion for illegal rental background check and credit reporting practices, for which TransUnion was ordered to pay $23 million.

Read this edition of Supervisory Highlights .

Read consumer complaints about consumer reporting companies and furnishers.

Consumers can submit complaints about financial products or services by visiting the CFPB’s website or by calling (855) 411-CFPB (2372) .

Employees who believe their company has violated federal consumer financial protection laws are encouraged to send information about what they know to [email protected] .

The Consumer Financial Protection Bureau is a 21st century agency that implements and enforces Federal consumer financial law and ensures that markets for consumer financial products are fair, transparent, and competitive. For more information, visit www.consumerfinance.gov .

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What the new inflation report means for mortgages

By Matt Richardson

Edited By Angelica Leicht

Updated on: April 10, 2024 / 12:08 PM EDT / CBS News

The latest inflation figures were released on Wednesday, and if homebuyers were hoping for a positive development, they're going to need to wait a bit longer. Inflation was up to 3.5% in March, up from February's 3.2% rate , and is now a full percentage point and a half above the Federal Reserve's target 2% goal.

"Over the last 12 months, the all items index increased 3.5 percent before seasonal adjustment," the Bureau of Labor Statistics said in a release. "The index for shelter rose in March, as did the index for gasoline. Combined, these two indexes contributed over half of the monthly increase in the index for all items. The energy index rose 1.1 percent over the month. The food index rose 0.1 percent in March. The food at home index was unchanged, while the food away from home index rose 0.3 percent over the month."

Amid this backdrop, homebuyers may be wondering how the new inflation report affects them. Below, we'll break down what it means for mortgage rates and what buyers can do in the interim.

Consider locking in a mortgage rate here now before they potentially rise higher .

What the new inflation report mean for mortgages

In short, the new inflation report isn't good news for homebuyers or current homeowners looking to refinance. But it doesn't mean that either group is totally out of options, either.

Elevated inflation will further dampen any Fed efforts to reduce interest rates and after two consecutive months of reports showing an uptick, it's not unrealistic to expect a potential increase this year. One Fed official has already cautioned that cuts could be completely off the table this year — and that was before Wednesday's disappointing report.

"If we continue to see inflation moving sideways, it would make me question whether we needed to do those rate cuts at all," Federal Reserve Bank of Minneapolis President Neel Kashkari said last week in an interview with Pensions & Investments magazine that aired on LinkedIn.

For rates to come down, inflation would theoretically need to drop significantly in the months to come, which seems unlikely following the reports that have been released so far in 2024 (a January report also showed inflation running hotter than anticipated). And until that happens, mortgage rates , already hovering near their highest point since 2000 , are unlikely to fall much (or at all). If lenders expect rate hikes to come later in the year, they could start pricing that in now with elevated rate offers to borrowers.

This is why it makes sense for current buyers to act aggressively now — before the price of home borrowing becomes even more prohibitive. After all, today's "high" 7% rate could become tomorrow's "low" one.

See what mortgage rate you could qualify for here today .

How to get a below-average mortgage rate now

In today's market, it pays to be creative. Here are two ways buyers can get a below-average mortgage rate in today's economy:

Buy mortgage points. Mortgage points serve as a fee the borrower pays to the lender to secure a below-average rate. This fee can be paid upfront at closing or rolled into the overall mortgage loan, but it can be effective for buyers eager for a lower rate. While you won't necessarily be able to buy a mortgage down to the lows of 2020 and 2021, you may be able to knock half a percentage point off what you otherwise would have secured. That can be a major advantage in any market, but particularly now in the face of overall rate uncertainty.
Consider an adjustable-rate mortgage. An adjustable-rate mortgage will start at one rate right now but adjust over time. The initial rate, which tends to be lower than the prevailing fixed rate, will last for several years (the time frame varies) before adjusting to a different, presumably higher rate. While that can normally be risky, it could be advantageous for buyers right now, particularly those who are confident that rates will have adjusted downward after that initial period has ended (at which point they could refinance into a lower, fixed rate instead).

The bottom line

With inflation on the rise once again, homebuyers looking for some relief will need to get creative. With higher inflation comes diminishing expectations for rate cuts, so buyers should look for other ways to get a lower rate, including buying mortgage points and an adjustable-rate mortgage. Neither option is ideal, but both could save buyers significant sums of money now that the fight against inflation seemingly has to continue a bit longer.

Matt Richardson is the managing editor for the Managing Your Money section for CBSNews.com. He writes and edits content about personal finance ranging from savings to investing to insurance.

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What Is a Charge-Off?

How a charge-off works, what happens with charged-off debt, the bottom line.

Credit & Debt
Debt Management

What Does a Charge-Off Mean? Effect on Credit Score and How to Remove

Julia Kagan is a financial/consumer journalist and former senior editor, personal finance, of Investopedia.

Investopedia / Mira Norian

A charge-off means a company has written off a debt because it does not believe it will receive the money that it’s owed. A delinquent borrower is still responsible for paying debt that is a charge-off.

A creditor or lender may use a charge-off when the borrower has become substantially delinquent after a period of time. Having a charge-off can mean serious repercussions on your credit history and future borrowing ability.

Key Takeaways

A charge-off is when a company writes off debt as a loss.
When a company uses a charge-off, it believes it can no longer collect, as the borrower has become delinquent on payments.
A delinquent borrower are still legally responsible for paying their debt.
Charge-offs may be sold to a collections company or a debt buyer .
You will owe a debt until it is paid off, settled, or discharged in a bankruptcy proceeding.

A charge-off usually occurs when the creditor deems an outstanding debt uncollectible; this typically follows 180 days or six months of nonpayment. However, the borrower is still legally responsible for paying a debt marked as a charge-off.

In addition, debt payments that fall below the required minimum payment for the period will also be charged off if the debtor doesn't make up for the shortfall. The creditor crosses off the consumer’s debt as uncollectible and marks it on the consumer’s credit report as a charge-off.

The fallout for having a charge-off on your credit report includes a fall in credit score and difficulty in getting approved for credit or obtaining credit at a lower interest rate in the future.

Paying off or settling the overdue debt doesn't mean the charge-off status will be removed from the consumer’s credit report. Instead, the status will likely be changed to “charge-off paid” or “charge-off settled.”

Either way, charge-offs remain on the credit report for seven years, and the affected party will either have to wait out the seven years or negotiate with the creditor to have it removed after paying off all the debt. In the latter case, if the inability to repay the debt on time was due to a temporary setback like job loss, the debtor could write to the lender explaining the issue, including proof of a good payment history up until the time of the setback.

The statute of limitations is the amount of time that a debt can be collected through the legal court system. Once the statute of limitations has passed, the debt is deemed too old to be collected. In this case, the borrower cannot be brought to court for the unpaid debt.

In fact, the debtor can countersue the collections agency that took them to court over a time-barred debt. A debtor can also sue if an agency attempting to collect on an old debt is asked not to contact the consumer again and does so anyway. Such actions are in violation of the Fair Debt Collection Practices Act (FDCPA) .

On the other hand, the removal of a charge-off status from a consumer’s credit report doesn't mean the statute of limitations has passed. If, after seven years, the charge-off is deleted from the report, the statute of limitations may still be in effect. In this case, the consumer can still be taken to court for a judgment on their unpaid debt. Each state has its own statute of limitations on debt, which, depending on the type of debt, could be as low as three years or as high as 15 years.

Note that just because a debt has passed the statute of limitations on its payment doesn't mean that the consumer no longer owes. It just means that the creditor or debt collector will not be able to get a judgment in court for the payment of the old debt.

Creditors refer to uncollectible debt as bad debt. When a firm incurs a bad debt, it writes off the uncollectible amount as an expense on the income statement. For a debt to qualify as a business bad debt, it must be incurred as part of normal business operations. The debt can be associated with another business or an individual. Bad debt charge-offs are more likely to occur when associated with unsecured forms of credit, such as credit card debts or signature loans .

Should I Pay Off Charged-Off Accounts?

You should pay off charged-off accounts because you are still legally responsible for them. You will still be responsible for paying off charged-off accounts until you have paid them, settled them with the lender, or discharged them through bankruptcy.

How Do I Remove Charge-Offs From My Credit Report?

You can try to remove a charge-off from your credit report by paying off the debt, negotiating a pay-for-delete agreement with the lender, or hiring a credit repair company . However, in most cases when you pay off a charge-off debt, the status of the debt will be changed to “charge-off paid.” A charge-off on your credit report can be a negative sign to other lenders, which can hinder your ability to get future loans .

Is a Charge-Off Worse Than a Collection?

A charge-off is generally considered worse than a collection for your credit. With collections, you typically have more negotiating power for getting them removed from your credit report.

A charge-off means that a lender has written off a loan as a loss. However, if you have a loan that is a charge-off, you're still obligated to pay it.

Having a charge-off on your credit report can negatively affect your ability to get future loans. So consider either paying down your charge-off loans as soon as possible or negotiating with the lender for a pay-for-delete agreement to remove it from your credit report.

HelpWithMyBank.gov: U.S. Office of the Comptroller of the Currency. “ My Loan Was Charged Off. So Why Is the Bank Still Requiring Payment? ”

Debt.org. " What Are Charge-Offs? "

Consumer Financial Protection Bureau. " Can Debt Collectors Collect a Debt That's Several Years Old? "

Federal Trade Commission. “ Fair Debt Collection Practices Act .”

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AT&T says a data breach leaked millions of customers’ information online. Were you affected?

FILE - The sign in front of an AT&T retail store is seen in Miami, July 18, 2019. The theft of sensitive information belonging to millions of AT&T’s current and former customers has been recently discovered online, the telecommunications giant said Saturday, March 30, 2024. In an announcement addressing the data breach, AT&T said that a dataset found on the dark web contains information including some Social Security numbers and passcodes for about 7.6 million current account holders and 65.4 million former account holders. (AP Photo/Lynne Sladky, File)

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NEW YORK (AP) — The theft of sensitive information belonging to millions of AT&T’s current and former customers has been recently discovered online, the telecommunications giant said this weekend.

In a Saturday announcement addressing the data breach, AT&T said that a dataset found on the “dark web” contains information including some Social Security numbers and passcodes for about 7.6 million current account holders and 65.4 million former account holders.

Whether the data “originated from AT&T or one of its vendors” is still unknown, the Dallas-based company noted — adding that it had launched an investigation into the incident. AT&T has also begun notifying customers whose personal information was compromised.

Here’s what you need to know.

WHAT INFORMATION WAS COMPROMISED IN THIS BREACH?

Although varying by each customer and account, AT&T says that information involved in this breach included Social Security numbers and passcodes — which, unlike passwords, are numerical PINS that are typically four digits long.

FILE - An AT&T sign is seen at a store in Pittsburgh, Monday, Jan. 30, 2023. AT&T said, Saturday, March 30, 2024, it has begun notifying millions of customers about the theft of personal data recently discovered online. (AP Photo/Gene J. Puskar, File)

Full names, email addresses, mailing address, phone numbers, dates of birth and AT&T account numbers may have also been compromised. The impacted data is from 2019 or earlier and does not appear to include financial information or call history, the company said.

HOW DO I KNOW IF I WAS AFFECTED?

Consumers impacted by this breach should be receiving an email or letter directly from AT&T about the incident. The email notices began going out on Saturday, an AT&T spokesperson confirmed to The Associated Press.

WHAT ACTION HAS AT&T TAKEN?

Beyond these notifications, AT&T said that it had already reset the passcodes of current users. The company added that it would pay for credit monitoring services where applicable.

AT&T also said that it “launched a robust investigation” with internal and external cybersecurity experts to investigate the situation further.

HAS AT&T SEEN DATA BREACHES LIKE THIS BEFORE?

AT&T has seen several data breaches that range in size and impact over the years .

While the company says the data in this latest breach surfaced on a hacking forum nearly two weeks ago, it closely resembles a similar breach that surfaced in 2021 but which AT&T never acknowledged, cybersecurity researcher Troy Hunt told the AP Saturday.

“If they assess this and they made the wrong call on it, and we’ve had a course of years pass without them being able to notify impacted customers,” then it’s likely the company will soon face class action lawsuits, said Hunt, founder of an Australia-based website that warns people when their personal information has been exposed.

A spokesperson for AT&T declined to comment further when asked about these similarities Sunday.

HOW CAN I PROTECT MYSELF GOING FORWARD?

Avoiding data breaches entirely can be tricky in our ever-digitized world, but consumers can take some steps to help protect themselves going forward.

The basics include creating hard-to-guess passwords and using multifactor authentication when possible. If you receive a notice about a breach, it’s good idea to change your password and monitor account activity for any suspicious transactions. You’ll also want to visit a company’s official website for reliable contact information — as scammers sometimes try to take advantage of news like data breaches to gain your trust through look-alike phishing emails or phone calls.

In addition, the Federal Trade Commission notes that nationwide credit bureaus — such as Equifax, Experian and TransUnion — offer free credit freezes and fraud alerts that consumers can set up to help protect themselves from identity theft and other malicious activity.

AP Reporter Matt O’Brien contributed to this report from Providence, Rhode Island.

Live Updates: Inflation Runs Hotter Than Expected

Consumer prices rose 3.5 percent in March from a year earlier, a larger-than-predicted jump. The underlying details could worry the Federal Reserve.

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+3.8% excluding

food and energy

+3.5% in March

Jeanna Smialek

What to know about the surprisingly strong inflation report.

A closely watched measure of inflation remained stronger than expected in March, worrying news for Federal Reserve officials who have become increasingly concerned that their progress on lowering price increases might be stalling.

The surprisingly stubborn inflation reading raised doubts among economists about when — and even whether — the Fed will be able to start cutting interest rates this year.

The Consumer Price Index climbed 3.8 percent on an annual basis after stripping out food and fuel prices, which economists do in order to get a better sense of the underlying inflation trend. That “core” index was stronger than the 3.7 percent increase economists had expected, and unchanged from 3.8 percent in February. The monthly reading was also stronger than what economists had forecast.

Counting in food and fuel, the inflation measure climbed 3.5 percent in March from a year earlier, up from 3.2 percent in February and faster than what economists have anticipated. A rise in gas prices contributed to that inflation number.

This week’s inflation figures come at a critical juncture for the Fed. Central bankers have been hoping to confirm that warmer-than-expected inflation figures at the start of the year were just a seasonal quirk, not evidence that inflation is getting stuck well above the 2 percent inflation target. Wednesday’s report offers little comfort that the quick early 2024 readings have not lasted.

“It is what it is: It’s a stronger than expected number, and it’s showing that those price pressures are strong across goods and services,” said Blerina Uruci, chief U.S. economist at T. Rowe Price. “It’s problematic for the Fed. I don’t see how they can justify a June cut with this strong data.”

Policymakers have made it clear in recent months that they want to see further evidence that inflation is cooling before they cut interest rates. Fed officials raised borrowing costs to 5.3 percent in 2022 and mid-2023, which they think is high enough to meaningfully weigh on the economy. Central bankers forecast in March that they will cut interest rates three times this year.

But Fed officials do not want to cut rates before they are confident inflation is on track to return to normal. Lowering borrowing costs too early or too much would risk allowing price increases to pick back up. And if households and businesses come to expect inflation to remain slightly higher, officials worry that could make it even harder to stamp out down the road.

That threat of lingering inflation has become a more serious concern for policymakers since the start of the year. Inflation flatlined in January and February after months of steady declines, raising some alarm at the Fed and among forecasters. Going into the year, investors expected the Fed to cut rates sharply in 2024 — to about 4 percent — but have steadily dialed back those expectations . Investors have recently begun to expect just two or three rate cuts.

Stocks futures dropped sharply following the inflation release as investors further pared back their expectations for lower rates.

Investors would like to see lower interest rates, which tend to bolster prices for assets like stocks. But the Fed might struggle to explain why it is cutting rates at the current moment: Not only is inflation showing signs of getting stuck well above the central bank’s target, but the economy is growing at a fairly rapid pace and employers are hiring at a robust clip.

In short, the Fed’s policies do not appear to have pushed America to the brink of a recession — and in fact, there are signs that they may not be having as much of an effect as policymakers had expected when it comes to growth.

While the Fed officially targets Personal Consumption Expenditures inflation , a separate measure, the Consumer Price Index report released on Wednesday comes out earlier and includes data that feeds into the other metric. That makes it a closely watched signal of how price pressures are shaping up.

The inflation report’s details offered little reason to dismiss the gauge’s continued stubbornness as a fluke. They showed that housing inflation remains firm, auto insurance costs picked up at a rapid pace and apparel prices climbed.

In a development that is likely to be especially notable for Fed officials, a measure of services inflation contributed to the pickup in annual inflation. Policymakers watch those prices closely, because they can reflect the strength of the underlying economy and because they tend to persist over time.

The question, increasingly, is whether Fed officials can cut interest rates at all this year in a world where inflation appears to be flatlining.

Ms. Uruci said that with every month inflation stays stubborn, the Fed may need to see more convincing evidence — and a more sustained return to deceleration — to feel confident that price increases are genuinely coming under control.

If the Fed does not cut rates soon, the election could make the start of reductions more politically fraught. Central bankers are independent of the White House and typically insist that they do not make policy with an eye on the political calendar.

Still, cutting in the months just before the election could put policymakers under a partisan spotlight : former President Donald J. Trump, the presumptive Republican nominee, has already painted possible rate cuts as a political ploy to help Democrats.

But given inflation’s unexpected staying power, the Fed is likely to want to take its time in adjusting policy. Kathy Bostjancic, Nationwide’s chief economist, said that rate cuts could now be delayed to this autumn — if they happen in 2024 at all.

“We now think September, if they start to cut rates, is more likely than July,” Ms. Bostjancic said. “It shakes the confidence that inflation is on this downward trend.”

Joe Rennison

Wall Street shudders on signs of unexpectedly strong inflation.

Signs of stubborn inflation rattled Wall Street on Wednesday, with stock prices sliding and government bond yields, which underpin interest rates throughout the economy, jolting higher.

The S&P 500 fell almost 1 percent. Other major indexes, including the tech-heavy Nasdaq Composite and the Russell 2000 index of smaller companies, also fell.

The moves followed a consumer inflation report that came in hotter than expected, with prices rising 3.5 percent in March from a year earlier, marking another month of stubbornly high inflation. That made it harder for investors to dismiss earlier signs that the progress in cooling inflation was patchy.

“The stalled disinflationary narrative can no longer be called a blip,” said Seema Shah, chief global strategist at Principal Asset Management.

That means the Federal Reserve could keep interest rates — the central bank’s primary tool for fighting inflation — elevated for longer.

Bets on a rate cut in June have dwindled since the data was released, pushing the first expected cut back later in the year. In January, investors had thought the Fed could cut rates as early as March.

So far this year, the fading prospects for rate cuts, which would be seen as supportive for the stock market, have yet to derail a tremendous rally that has taken hold in recent months. But some analysts question how long that can continue, with higher rates eventually squeezing consumers and crimping corporate earnings in a more significant way.

The two-year Treasury yield, which is sensitive to changes in interest rate expectations, lurched toward 5 percent on Wednesday, a threshold it hasn’t breached since November. The dollar gained about 1 percent against a basket of other major currencies — a major move in that market — as the prospect of U.S. rates remaining high made the dollar more attractive to global investors.

“The Fed is not done fighting inflation and rates will stay higher for longer,” said Torsten Slok, chief economist at the investment giant Apollo, adding that he does not expect any cuts to interest rates this year.

Even as many investors noted that the economy remained resilient, the fresh inflation numbers appeared to dim the outlook just as Fed officials had started gaining confidence in their ability to wrangle inflation nearer to their 2 percent target.

Lindsay Rosner, head of multi-sector investing at Goldman Sachs Asset Management, said the data did not “eclipse” the Fed’s confidence.

“It did, however, cast a shadow on it,” she said.

The economists I’ve talked to this morning are pushing back their rate-cut expectations based on today’s report. And for some, it’s not just a matter of expecting a July or September move instead of a June one: A few think it’s increasingly likely that the Fed won’t lower rates at all this year.

The logic here is that if officials don’t cut rates this summer, it might be optically tricky to begin doing so just before the election. “If they don’t go in July, are they going to really go in September? It’s like: If not June, then July. And if not July, then December,” Neil Dutta at Renaissance Macro told me.

J. Edward Moreno

Energy prices rose in March.

The price of energy continued to rise in March, driven in part by geopolitical risks that have pushed up the price of oil, contributing to a stronger-than-expected pace of inflation.

Wars in Ukraine and the Middle East have caused the price of Brent crude oil, the international benchmark, to rise more than 20 percent since mid-December. That rise may have been reflected in the inflation data: Energy prices rose 1.1 percent month over month and 2.1 percent year over year.

The price of gasoline rose 1.7 percent in March and 1.3 percent over the past year. Gas prices rose at a sharper rate in February, at 3.8 percent, but had declined for four months prior.

The Federal Reserve tends to ignore moves in gas prices in the short term, because fuel is volatile and responds more to global developments than to domestic economic policy. Even so, higher gas costs are felt acutely by consumers and can eventually bleed into other types of inflation — pushing up transportation costs like airline fares, for instance.

The price of utilities rose 0.7 percent in March and 3.1 percent year over year.

Electricity prices rose nearly 1 percent in March and have gone up 5 percent in the past year. Gas utility prices were flat in March and have fallen 3.2 percent in the past year.

Jim Tankersley

A hot inflation report is a blow to President Biden.

President Biden said on Wednesday that he still expected the Federal Reserve would cut interest rates this year despite a re-acceleration in price growth across the economy, though he said new data suggested that cut might be pushed to later in the year.

“I do stand by my prediction that before the year is out, there will be a rate cut,” Mr. Biden said at a news conference alongside Prime Minister Kishida Fumio of Japan, after the two of them met at the White House.

“This may delay it a month or so — I’m not sure of that,” Mr. Biden said. “We don’t know what the Fed is going to do for certain. But look, we have dramatically reduced inflation.”

Mr. Biden’s comments dipped a toe into what has historically — with notable exceptions — been a taboo subject for presidents: weighing in on Fed policy. Many of Mr. Biden’s predecessors have refrained from even speculating about interest-rate decisions, citing the Fed’s independence. The president’s immediate predecessor and now re-election opponent, Donald J. Trump, broke from that history, by frequently and loudly criticizing the Fed when he was president and demanding the central bank to reduce interest rates.

Mr. Biden’s aides talk frequently about the need for the central bank to remain independent. His comments, even though they were more in the vein of punditry than directive, risked, albeit slightly, blurring that line.

Mr. Biden has been banking on cooling inflation — and ensuing rate cuts — to lift his re-election prospects.

The president and his aides have publicly cheered the retreat of annual inflation rates over the past year, after watching the fastest price growth in 40 years dent the president’s approval ratings earlier in his tenure.

They have been anxious for inflation to fall even further, in order give relief to consumers and to potentially spur the Federal Reserve to cut interest rates — a move that would help to drive down borrowing costs for mortgages, car loans and other consumer credit. Mr. Biden has been particularly focused on home buyers, including young voters who are key to his electoral coalition, and who are struggling to afford high housing prices as mortgage rates remain around 7 percent.

Wall Street analysts saw Wednesday's surprise pickup in the inflation rate as a sign that the Fed could leave rates on hold for months longer than expected. That could mean no cuts before the November election, a campaign where Mr. Biden’s Republican opponent, former President Donald J. Trump, has slammed Mr. Biden for both rapid price increases and high borrowing costs.

The news comes as polls have begun to show Americans’ views of the economy slowly improving over recent months. Democratic pollsters have also pointed to recent surveys as a road map for how Mr. Biden should talk about inflation in the months to come: They suggest American voters blame corporate greed, more than government spending, for price increases. Mr. Biden has leaned into that message, including calling out companies in his State of the Union address for keeping prices high.

He struck a similar tone on Wednesday in a statement that emphasized consumer frustration with inflation.

“Prices are still too high for housing and groceries, even as prices for key household items, like milk and eggs, are lower than a year ago,” Mr. Biden said. “I have a plan to lower costs for housing — by building and renovating more than two million homes — and I’m calling on corporations, including grocery retailers, to use record profits to reduce prices.”

Madeleine Ngo

After the report’s release, President Biden said his administration was making progress on fighting inflation, but there was still work to be done.

“Prices are still too high for housing and groceries, even as prices for key household items like milk and eggs are lower than a year ago,” Mr. Biden said. “I have a plan to lower costs for housing — by building and renovating more than 2 million homes — and I’m calling on corporations including grocery retailers to use record profits to reduce prices.”

Lydia DePillis

Julia Pollak, chief economist for the job search website ZipRecruiter, noted that inflation’s remedy — high interest rates — actually props up one of the largest drivers of price increases. “Rapidly rising housing costs continue to be the economy’s Achilles heel — and the inventory crunch brought about by mortgage rate hikes isn’t exactly helping,” she wrote.

One way of looking at goods inflation is to divide it into durables, like cars and furniture, and nondurables, like food and clothing. Durables have been coming down in price gradually, but nondurables are still near their peak, and are up 1.7 percent over the year.

Driven in part by rapid population growth, price increases have been swiftest in the South, at 3.8 percent over the past year versus 2.8 percent in the Midwest. Across cities, the Labor Department highlighted inflation in Dallas at 4.9 percent since last March, and Minneapolis at only 2.7 percent.

Talmon Joseph Smith

The core inflation rate “surprised to the upside" because of some auto-related categories, like insurance, repair and leased cars, said Omair Sharif of the firm Inflation Insights, adding that “auto insurance doesn’t show any signs of slowing down.”

There has been a lot of talk about how the data on shelter costs was “lagged,” mostly reflecting rent increases from 2022. But, for now, those expected lags are not unfurling. According to the latest data, the rise in the index of shelter costs was the largest factor in the monthly increase in the "core" inflation measure.

Good news for parents: The price of toys, which had been dropping through the late 2010s and flattened out during the pandemic, has resumed its downward slide and is now 8.2 percent lower over the year.

Ben Casselman

Housing costs continued to rise faster than before the pandemic.

Inflation’s most stubborn category remained stubborn last month.

Housing costs rose 0.4 percent in March and were up 5.7 percent from a year earlier, both unchanged from the month before. Shelter inflation has cooled since last year, when it peaked at more than 8 percent, but lately that progress has slowed.

Housing is by far the largest monthly expense for most families, which means it also weighs heavily in inflation calculations. Shelter accounts for more than a third of the Consumer Price Index, meaning it will be difficult for the Federal Reserve to tame inflation fully as long as housing costs continue to rise at their recent rate. Before the pandemic, shelter costs rose at a rate of about 3.5 percent per year.

Housing costs in the Consumer Price Index are based on rents. Economists have been expecting housing inflation to cool because of data from companies like Zillow and Apartment List showing rents rising more slowly or even falling outright in some markets.

The government’s rent index tends to move more slowly than the private-sector measures because of methodological differences, but economists have been surprised by how long the gap has persisted.

Most forecasters still believe the rent slowdown will show up in the government’s official measures eventually. But a few have begun to wonder if changes in the housing market, alongside demographics and other forces, could cause housing costs to continue to rise at a faster pace than before the pandemic. That would be bad news for the Fed because it would mean that prices in other parts of the economy would have to rise more slowly in order for overall inflation to return to its long-run target.

“This strength in shelter inflation, it’s concerning and somewhat puzzling,” said Blerina Uruci, chief U.S. economist at T. Rowe Price.

Capital Economics’ Chief North America economist Paul Ashworth wrote in a note that the report “pretty much kills off hopes of a June rate cut from the Fed,” noting that expected drops in rental costs haven’t manifested.

Food inflation remained relatively unchanged in March. Overall, food prices climbed 0.1 percent from the prior month, a slight increase from February, when prices were flat. Grocery prices were also flat for the second straight month.

Egg prices, however, continued to climb at a relatively rapid rate. In March, egg prices rose 4.6 percent over the month. That was still down from the previous month, though, when egg prices rose 5.8 percent.

Medical care services, which include hospitals and health insurance, are another factor propping up the index. After sagging in 2022 and 2023, they turned around over the past six months and are now up 2.1 percent over the year.

Food inflation remained relatively unchanged in March.

Food price gains remained relatively unchanged in March, providing little relief for consumers struggling to deal with higher food costs.

Overall, food prices climbed 0.1 percent from the prior month. That is a slightly faster rate than February, when prices were flat.

Grocery prices were flat for the second straight month. The cost of dining out climbed 0.3 percent, an increase from 0.1 percent in February.

Compared to a year earlier, food inflation rose at the same rate it did in February. Although the annual rate had been moderating for several months, food prices were up 2.2 percent for the second straight month.

Prices for fruits and vegetables increased 0.1 percent over the month after they fell 0.2 percent in February. Meats, poultry and fish prices rose 0.6 percent, up from February, when prices declined 0.3 percent. Costs for dairy and related products declined 0.1 percent in March.

Egg prices continued their ascent, although they increased at slower rate than February. In March, egg prices rose 4.6 percent from the month before, down from February, when egg prices climbed 5.8 percent. Economists have largely attributed the recent uptick in egg prices to avian influenza outbreaks . Although bird flu outbreaks also contributed to a big surge in egg prices early last year, prices have not risen as much as they did then. Egg prices are still down 6.8 percent over the past year.

Food inflation has cooled over the past several months as transportation and raw material costs have moderated. The cost of eating at restaurants, however, has been slower to ease because higher labor costs continue to put pressure on business owners.

Economists said they expected to see overall food inflation continue to ease in the coming months. Still, many consumers continue to struggle with higher food prices, and some surveys have found that consumer estimates of food inflation were significantly higher than actual figures.

“Americans are overestimating food price inflation, not just by a little, but by a lot,” said Joseph Balagtas, a professor of agricultural economics at Purdue University.

Some economists have said that consumers might not be feeling much relief because food prices are much higher than they were several years ago. Although overall food prices have been increasing at a slower rate in recent months, they are still up about 25 percent compared to four years ago.

The dollar is up about 0.6 percent against a basked other currencies, as investors expect higher interest rates to stick around for longer. Higher rates make the dollar more attractive for foreign investors trying to profit from the higher costs of borrowing, pushing up the value of the dollar.

“It is what it is: It’s a stronger than expected number, and it’s showing that those price pressures are high across goods and services. So I think it’s problematic for the Fed,” said Blerina Uruci, chief U.S. economist at T. Rowe Price.

The story is more encouraging for motor vehicles. Prices for new cars and trucks have been essentially flat for the past year, while used vehicles continued their bumpy decline, dropping 1.1 percent over the month.

In some evidence that the goods disinflation that we’ve been seeing might be stalling out, apparel prices rose a surprising amount, at 0.7 percent over the month. The increase was driven by girls’ clothing, which had been decreasing in price, while boys’ clothing had never dropped much.

Investors had appeared to shift their focus recently to the strength of the economy rather than on inflation’s stubbornness. These numbers will test their resolve, prompting a re-evaluation of how long interest rates will stay high and, as a result, how long the screws will be turned on the economy.

One of the strongest categories in March was transportation services, which rose 1.5 percent over the month. It was driven primarily by motor vehicle repair and insurance costs, which my colleague Talmon wrote in February were surging as insurers took big rate increases.

Investors reacted swiftly to the new numbers, with futures on the S&P 500 sliding by as much as 1 percent. Investors also appear to expect interest rates to stay higher to tame stubborn inflation, with the two-year Treasury yield, which is sensitive to changes in interest rate expectations, rising sharply to 4.9 percent.

“This number did not eclipse the Fed’s confidence, it did, however, cast a shadow on it,” said Lindsay Rosner, head of multi-sector investing at Goldman Sachs Asset Management.

Consumer prices rose 0.4 percent in March and were up 3.5 percent from a year earlier. “Core” prices, which exclude the volatile food and fuel categories, were up 0.4 percent from February and 3.8 percent from a year earlier.

These numbers are hotter than what forecasters expected, and definitely not what the Fed was looking for.

One thing not to worry too much about? Inflation is expected to pick up on an overall annual basis, to 3.4 percent from 3.2 percent previously. That’s largely because of gas prices, which matter a lot for customers but which bounce around so much that economists mostly ignore them in the short run.

Stanley Reed

What’s behind the recent rise in oil prices.

Oil prices have climbed in recent weeks, spurred by concerns over supplies and geopolitical risks, including wars in Ukraine and the Middle East. Analysts say the momentum could carry prices higher.

The price of a barrel of Brent crude oil, the international benchmark, has risen more than 20 percent since mid-December. It has jumped more than 10 percent over the past month alone, to around $90 per barrel. “The sentiment is really bullish,” said Viktor Katona, an analyst at Kpler, a commodities research firm.

Rising oil prices could make efforts by central banks to reduce inflation more challenging. In the United States, higher gasoline prices during the summer driving season would also be unwelcome for the Biden administration, which faces a difficult election in November. The average price at the pump has risen about 50 cents per gallon since early January, to around $3.70, according to the Energy Information Administration.

The price of gold, seen as a hedge against inflation, has hit new highs.

Wall Street is puzzled.

Gold, typically seen as a haven in periods of economic turmoil, especially as a hedge against inflation, has risen sharply in price over the past month, even as the outlook for the economy has improved and inflation, although still elevated, is well below recent highs.

The precious metal has set a series of record highs as it surged roughly $300, to $2,350 per troy ounce, since the start of March.

The move has been attributed, at least in part, to a burst of gold buying from central banks around the world, including China. But investors said that central bank purchases did not fully explain such a sudden price increase.

“It’s perplexing to anybody in the gold market,” said Chris Mancini, a gold portfolio manager at Gabelli Funds.

He noted that exchange-traded funds, a type of investment vehicle that trades publicly like a stock, had been suffering withdrawals from investors, which is usually a warning sign for gold watchers. And in futures markets, which are derivatives linked to the price of gold, demand had remained muted until the start of this month when some money managers began buying, official data showed.

And that still does not explain how the rally got started, with some speculation that tumultuous geopolitics are driving public and private investments in gold.

“All we can point to is that it is physical demand from somewhere that is not being picked up in the data we see,” Mr. Mancini said.

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IRS reminder: 2024 first quarter estimated tax payment deadline is April 15

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Estimated tax payments | ASL

IR-2024-95, April 5, 2024

WASHINGTON —The Internal Revenue Service today advised taxpayers, including self-employed individuals, retirees, investors, businesses and corporations about the April 15 deadline for first quarter estimated tax payments for tax year 2024.

Since income taxes are a pay-as-you go process, the law requires individuals who do not have taxes withheld to pay taxes as income is received or earned throughout the year. Most people meet their tax obligations by having their taxes deducted from their paychecks, pension payments, Social Security benefits or certain other government payments including unemployment compensation.

Generally, taxpayers who are self-employed or in the gig economy are required to make estimated tax payments . Likewise, retirees, investors and others frequently need to make these payments because a significant portion of their income is not subject to withholding.

When estimating quarterly tax payments, taxpayers should include all forms of earned income, including part-time work, side jobs or the sale of goods or services commonly reported on Form 1099-K .

Income such as interest, dividends, capital gains, alimony and rental income is normally not subject to withholding. By making quarterly estimated tax payments, taxpayers can avoid penalties and uphold their tax responsibilities.

Certain groups of taxpayers, including farmers and fishers, recent retirees, individuals with disabilities, those receiving irregular income and victims of disasters are eligible for exceptions to penalties and special regulations .

Following recent disasters, eligible taxpayers in Tennessee , Connecticut , West Virginia , Michigan , California and Washington have an extended deadline for 2024 estimated tax payments until June 17, 2024. Similarly, eligible taxpayers in Alaska , Maine and Rhode Island have until July 15, 2024, and eligible taxpayers in Hawaii have until Aug. 7, 2024. For more information, visit Tax relief in disaster situations .

In addition, taxpayers who live or have a business in Israel, Gaza or the West Bank, and certain other taxpayers affected by the terrorist attacks in the State of Israel , have until Oct. 7, 2024, to make estimated tax payments.

Paying estimated taxes

Taxpayers can rely on Form 1040-ES, Estimated Tax for Individuals , for comprehensive instructions on computing their estimated taxes.

Opting for the IRS Online Account streamlines the payment process, allowing taxpayers to view their payment history, monitor pending payments and access pertinent tax information. Taxpayers have several options to make an estimated tax payment, including IRS Direct Pay , debit card, credit card, digital wallet or the Treasury Department's Electronic Federal Tax Payment System (EFTPS) .

To pay electronically and for more information on other payment options, visit IRS.gov/payments . If paying by check, be sure to make the check payable to the "United States Treasury."

Publication 505, Tax Withholding and Estimated Tax , offers detailed information for individuals navigating dividend or capital gain income, alternative minimum tax or self-employment tax, or who have other special situations.

The IRS recommends taxpayers use the Tax Withholding Estimator tool to accurately determine the appropriate amount of tax withheld from paychecks.

Regularly monitoring withheld taxes helps mitigate the risk of underpayment, reducing the likelihood of unexpected tax bills or penalties during tax season. It also allows individuals to adjust withholding upfront, leading to larger paychecks during the year and potentially smaller refunds at tax time.

Filing Options

The IRS encourages people to file their tax returns electronically and choose direct deposit for faster refunds. Filing electronically reduces tax return errors because tax software does the calculations, flags common errors and prompts taxpayers for missing information.

The IRS offers free online and in-person tax preparation options for qualifying taxpayers through the IRS Free File program and the Volunteer Income Tax Assistance and Tax Counseling for the Elderly programs .

In addition, the Direct File pilot program, a new option that allows eligible taxpayers to file their federal tax returns online directly with the IRS for free, is currently available in 12 participating states.

Assistance available 24/7 on IRS.gov

IRS.gov offers tax assistance 24/7. To address general tax concerns, taxpayers can access various online tools on the IRS website, to include the Interactive Tax Assistant , tax topics and frequently asked questions to get answers to common questions.

The IRS has also posted translated tax resources in 20 other languages on IRS.gov to communicate to taxpayers who prefer to get information in other languages. For more information, see the IRS Languages page on IRS.gov.

More information:

⦁ Topic no. 653, IRS notices and bills, penalties, and interest charges

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