How To Read A Credit Report - Part 2
Potentially Negative ItemsLet's address this quickly, like ripping off a Band-Aid. If you haven't already guessed, the "Negative Items" section will list any negative accounts, accounts that went to collections, and other related public records. All of these regrettable items will stay on your record for about seven years unless you have a Chapter 7 bankruptcy. Those little rays of sunshine will be flying overhead like buzzards for up to 10 years.
As with the positive information section, you should review this list carefully and make sure your negative information is accurate, especially if you are being held responsible for an offense you didn't commit! If you find an incorrect account, or you see a record of an account went to collections when it didn't, dispute these inaccuracies immediately. You'll want anything like that removed.
Record of RequestsThe "Record of Requests" section may also be called the "Inquiries" section of your report. Here, you'll find a list of all requests (or inquiries) to see your report, whether you made these yourself (known as "Soft Inquiries") or another party made these requests (called "Hard Inquiries"). Soft Inquiries, which are shared only with you, don't affect your score. Hard Inquiries, on the other hand, can have an impact for up to one year and stay on your record for around two years. Bear in mind, though, that you have to authorize hard inquiries personally for them to go through. When reviewing this section, make sure that you authorized all the reported Hard Inquiries. You don't want to pay the price for someone else's mistake!
DisputesRemember to dispute all relevant inaccuracies you might find on your report. If you find an error, you'll need to prepare documentation to prove the reported information is inaccurate before submitting your dispute to the bureau that supplied the erroneous report. Make a note of the date you submit your dispute, too! If nobody has answered your dispute within 30 days, follow up and push the issue.
Final WordThere you have it. The report may seem like it's written in an ancient and mystical language, but it isn't that difficult to decipher with time, patience, and common sense. However, it's a good idea to monitor your reports regularly. The reports are free, so get a copy from each bureau annually. Make sure everything listed is correct. Inaccuracies can have serious consequences that lower your score, and cause you to miss out on deals you've earned! Dispute whatever mistakes you might find and maintain your financial standing.
Your credit report is a valuable tool for improving and maintaining your credit score. Be sure to use it!