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
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.
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.
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
- 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,
- 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
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.
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
score to be poor/low if you have anything listed in this
section. Your goal should be to have a 100% clear public
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
why too many inquires is bad.
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
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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