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Credit Report: How To Read Your Credit Report (credit report)

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Credit Report: How To Read Your Credit Report

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Credit Report: How To Read Your Credit Report
The Fair and Accurate Credit Transactions Act, signed into law in Dec. 2003. This law gives Americans the right to a free credit report every year from each of the top three credit bureaus -- Equifax, Experian and TransUnion.

What the law does not do is give every American the ability to read their credit report. It is not mentioned in the law that the credit bureaus have to write the contents in plain, easy to understand language. To read the Fair and Accurate Credit Transactions Act, go to http://www.ftc.gov and click on consumers then credit. I am hopeful, you will stay up. If not, brew some coffee.

While all credit reports have a general format, some vary so what you are about to read doesn't apply across the board. If you didn't get your report directly from one of the bureaus mentioned above, your best bet for a translation is the source providing your copy.

Most bureaus use the below four part general skeleton.

Your identifying information. This would be personal information like your name, SSN, DOB, previous addresses, current address, driver's license number, telephone number, spouse's name and some employer related information like employer name / length of employment. Pay close attention to details because chances are pretty darned good, some of it is wrong.

The information assimilated by the bureau is sometimes wrong. It is wrong because this information comes to the bureau from a myriad of sources and the bureau lacks the time to update or correct it. That leaves you as your own correcting agent.

Your credit history. Credit history is usually the longest part of your credit report since you probably have had department store accounts, different credit cards, multiple bank and other financial institution loans, car loans, mortgages, lines of credit, home equity loans and other transactions involving credit.

You will see that the bureau calls these accounts as trade lines. This is no big deal since they are still your accounts.

These accounts normally start with the account opened date, the type of credit (installment, car loan, personal loan, etc.) and whether it is in your name or someone else is joint on the account with you. The total amount of the loan with your set credit limit or if it is a credit card, your highest balance follows. The next piece of information is how much you still owe and if the payments are fixed or in minimum monthly amounts. Your status, open / inactive / closed / paid, follow your payments. Finally you have the information that everyone is interested in. How well you've paid on the account?

This is where the credit bureaus will list if you are late, and if late, how late and how often you've been late. If you are not late, it will show that you pay on time.

Public Inquiries / Public Records. This is an important section where tax liens, foreclosures, judgments, and bankruptcies are listed. Trust me, you want this part to be squeaky clean. In other words, blank. If you see anything here, attempt to correct as soon as possible.

Inquiries section. The inquiries section is divided into two parts, hard inquiry section and soft inquiry section. Part one are the inquiries you initiate by filling out a credit application. This section is usually referred to as the hard inquiry section because you are the initiator of the inquiries.

The second part is called the soft inquiry section. In this section you will find the names of companies who have sent you offers of credit or current creditors who are monitoring your account.

Remarks. At times, thers is a fifth optional section called Remarks. Read it to understand who reported what about you.

On the backside of the report pages, each credit report bureau places an explanation of terms pertaining to the report. In it, they explain what the numbers and letters you see next to your accounts mean. So, if you see something like I9, don't fret as it should be defined in the explanation of terms. Use the explanation of terms as you last resort before calling them up.

Of course, I9 could be negative, so you may have to fret. Either way, you are now almost totally armed to deal with the free credit report the bureaus have to offer you.

Good luck in your credit endeavours and may all your credit be A+.

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