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How To Read A Credit Report

Whether your credit is hot or not, you need to know what's in your credit report. Unfortunately, these documents aren't exactly best-selling paperback material. They can be boring, intimidating, and even overwhelming. Don't let that put you off. The information in your report is crucial to understanding your financial position, planning your financial strategy, and checking for potential errors that could be hurting your credit score. You need to understand how to read that correctly. The effort you put into reading your report will pay off as you learn to lead a financially responsible lifestyle.

Are you still scratching your head? Don't worry! You've come to the right place. Let's take a look at how to read your report.

Get the Triple
It's best to get a copy of your report from all three major bureaus: Experian, Equifax, and TransUnion. Different lenders use different reports to make lending decisions, and an error on even one report, if left uncorrected, can negatively impact your credit score. Inaccuracies may seem trivial, but if you leave them unchecked, they will cost you real financial opportunities and savings. That's a good enough reason for anybody to check out their report!

Obtaining Your Report
You're entitled to a free annual report from Experian, Equifax, and TransUnion, the three major tracking bureaus. Getting your hands on them is easy! Just head on over to AnnualCreditReport.com (which is authorized by federal law) and follow the website guidelines to apply. Most experts advise getting one of the three every four months, giving you a basis for continuing comparison and evaluation.

Now that we've gotten through the easy part let's talk about reading your report. We'll summarize and explain each section below. Keep in mind, the order in which the following information appears will differ depending on which bureau supplied it. All of the necessary information will be there, whatever the differences in format.

Summary
It would be great if all reports came with a preliminary summary of their entire contents! Unfortunately, that isn't always the case, and whether or not you get a summary depends on which bureau is involved.

A summary will usually include a listing of everything on your report: all your accounts that are in good standing, along with a less-pleasant list of potentially negative items. You won't see your actual credit score. If you have a card from Discover, Citi, Chase, Bank of America, Barclaycard, Commerce Bank, American Express, Capital One, First Bankard, USAA Bank, US Bank, or Walmart, you're in luck![1] These providers offer members a monthly look at their score, for free.

Personal Information
"Personal Information" includes your name, date of birth, current address, previous addresses, the types of residences, your current and previous employers, and your telephone number. Your previous telephone numbers may be listed too.

Don't panic if you see a different spelling of your name, or if something like a telephone number is missing. You don't have to dispute small issues like that. Just ensure that the information is your information, not somebody else's. Mistakes about identity do occur, and you want to make sure you aren't bearing somebody else's costs!

Accounts in Good Standing
Hopefully, most of your accounts are in good standing. This particular section may be referred to on your report as any of the following:

Accounts in Good Standing
Open and Closed Accounts
Satisfactory Accounts

Here, you'll find a list of all current accounts that haven't been defaulted on or gone to collections. Each account in this section comes with the following information:

Account Number
Creditor's Name & Address
Account Status & Details

The Account Status section will tell you if the account is open or closed, if it has been transferred, and whether or not you have any late payments. If you have any closed or transferred accounts, you'll find the scheduled removal date in the Details section. The removal date is usually around ten years after the last report from the account.

You will see dates for the following events:

Initial Account Opening
First Report
Current Status
Last Reported

All of those dates are followed by the respective account type (e.g., student loan, card, etc.), loan terms, monthly payment, and accountable parties. Your status as an individual account owner, joint account owner, or even just an authorized user will be included.

This section will also detail each account's limit and balance (along with the payment information). Just remember that this information is based on the last amount reported to the bureaus, so it might not be current.

You need to ensure that every one of your current accounts is listed in this section and that the payment history accurately shows all on-time payments. Also, make sure each account's limit is correct and that all the accounts listed are yours! You don't want some mystery accounts floating around under your name.



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