HOW TO READ A CREDIT A REPORT

Information about your financial behavior is documented in your credit report. This includes details about all of your accounts and how you pay these accounts - more specifically, your payment history. Every month, all of your lenders and creditors will update your account information with all three of the major credit bureaus (Experian, Equifax, TransUnions) who in turn will each update their respective credit reports and scores that they have for you. It is a good idea to obtain a copy of your credit report at least once/year to ensure that information is accurate and up-to-date. You also want to be able to detect identity theft before its too late. You can get a free copy of your credit report here. Once you obtain your report, you will need to know how to decipher all of the information present. Below, we summarize how to read your credit report.

Your credit report consists of five main parts - personal info, public records, account history, inquiries and credit summary sections. You can see a sample credit report.

Personal Info
This segment of your credit report details all the information that identifies you as being you. This includes your name, birthday, social security number, previous and current addresses, phone number and location of employment. Also, if you have every changed your legal name, you can expect your former name to also be present in this section of your report.

It is very common for misspellings to be listed on your credit report, This is likely a result of one of your creditors reporting one of your identifiers incorrectly. Creditors will not automatically correct the information. You will need to contact your creditor directly and request for them to correct the info and update your file.

Account History
The majority of the information on your credit report is the section related to your account history. Present in this area will be all of your accounts as well as the information below:

- Creditor
- Account numbers
- Most recent account balance
- Date you opened the account
- Credit limit
- Account status - closed, inactive, open, etc.
- Current payment status - late, 30 days late, 60 day late, etc.
- Payment history
- Monthly payments being made
- Last dates each of the bureaus updated the account
- High balance - More specifically, the highest balance you ever had on the account.
- Creditor comments

Credit Summary
Most credit reports will contain a credit summary linking your personal information and credit accounts sections. This synopsis will include the total number of accounts that you encompass, their combined total balances and payments as well as the amount of derogatory and current accounts. Your credit summary allows you to obtain a quick, but thorough analysis of your credit status.

Public Records
Your public records section will list any judgments, bankruptcies, and/or tax liens that you have experienced. You don't have to worry about your criminal record (if you have one) being listed on your credit report since only financially associated info is incorporated. However, there are states that will report overdue child support payments as public records. It is likely that any accounts that you have in collections will also appear in your public records section.

Your public records is the most impacting part of your credit report. You can expect your credit score to be poor/low if you have anything listed in this section. Your goal should be to have a 100% clear public records.

Inquiries
Anyone that has pulled your credit report within the last two years is going to be listed in this section. There are two kinds of inquiries: soft pulls and hard pulls. A soft inquiry or pull is when you order your credit report for self examination purposes. A hard inquiry is when you apply for any type of loan or credit and that potential creditor examines your credit when determining whether or not to grant the credit that you have applied for. When you order a copy of your credit report, you will see both hard and soft inquiries listed. However, when you apply for credit, creditors will only see the hard inquiries. It is important to learn why too many inquires is bad.

In conclusion...
Understanding the information on your credit is important. You'll be able to spot info that is inaccurate or outdated and therefore allow you to ensure that your credit report is 100% accurate and your credit score (FICO) is reaching its potential. It is important to note that is very likely that your credit report and score are going to be reported differently by each bureau. Some creditors will only report your info to one or two of the bureaus. And the bureaus will only share info with each other in particular situations. Therefore, it is a good idea that when you are getting your credit report, to obtain a 3-in-1 credit report.

Effects of Having Bad Credit
What are the Hardest Credit Items to Fix?
Credit Report FAQ
Correcting Your Credit Report
Value of a Free Credit Report
Things That Hurt Your Credit Score
Credit Report Secrets
How Long Do Negative Marks Stay On My Credit Report?

Anatomy of a credit report
 

 



 

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