How to Read Credit Report
March 24th, 2009, Written By: admin
Need to figure out how to read your credit report? At first glance it may seem like a complicated and confusing document, but once you know what you’re looking for, it really is quite simple to translate. In short, your credit report should accurately show the history of your financial accounts, previous addresses, and employers for the past 7 years. Because there are actually 3 separate credit reporting agencies, you have 3 separate reports that should be identical, but that’s not always the case.
The credit reporting agencies have to job of collecting information from your lenders and creditors, and listing that information in a clear and concise manner. These documents list that accounts you paid online and the times you were late. It will list any accounts that are in collections, and any repossessions, foreclosures and bankruptcies. The credit scoring agencies then take this information and assign a score, which represents how well you manage your debts.
Because there are millions of people with billions of transactions a day that these credit reporting agencies must manage, they don’t always report the most accurate information. That is why it is not only important to regularly review one of your credit reports, but all 3 of your files. Just because one report is clean doesn’t mean that the other 3 have the same exact information.
How to Read Credit Report
These important documents are basically broken down into three sections:
- Your Personal Information: This section lists your name, address, and most importantly check to make sure your Social Security Number is properly identified. This section may also list your employer, previous employers, previous addresses, your driver’s license number, and your spouse’s name. While these secondary items may not directly affect your credit score, it is a good idea to check for accuracy.
- Your Credit History: This section will list all of your accounts that you currently have open or opened in the past. Here you will see the account number and lender’s name, they type of loan, the average amount owed, the status of the account, and your payment history.
- Public Records: This lists any financially related information about you that is available to the public, such as: judgments, foreclosures, bankruptcies, and tax liens. Anything listed in this section is considered bad.
- Inquiries on Your Account: This section lists all the creditors and lenders that have pulled your credit. You will see soft inquiries, which are instances where creditors were able to see partial information about your credit history. Permission is not needed for this, and it does not affect your credit score in any way. Hard inquiries list the instances where you gave authority for companies to pull your credit to review it for a loan, lease or credit. Multiple hard inquiries on your account can affect your credit score.
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