Learning How to Read Your Credit Report
All citizens of the United States are rightfully able to request a free credit report every year from the three big reporting bureaus. Equifax, Experian and TransUnion are lawfully obliged to provide these reports free of charge in annual installments, which means that consumers can request each one in turn and receive a free credit report every 4 months. Ordering the free credit report is the easy step (you can order online at annualcreditreport.com, call on 1-877-322-8228 or request by post), the important and more difficult part is reading and understanding the report.
All credit reports will be identifiable as yours through the detailed personal information section. Whilst this is information you are well used to seeing, take the time to check it thoroughly and ensure that it is all present. Small mistakes in the spelling of your name or address aren’t the worst thing in the world, but an incorrect employer cited or an entirely different name altogether should be fixed.
The credit summary of your report is an abridged and easy-to-understand section where you can instantly see that state of your affairs. Information listed here includes number of revolving accounts, total accounts, balances, delinquencies etc. Bear in mind that some information here, such as the amount of inquiries, is time sensitive and will be removed from your report after a given period.
This is the most comprehensive section of your credit report, containing information on each of your present and past credit accounts. All types of credit are included here, from the retail store card you inadvertently signed up for to the mortgage on your house. Every account registered in your name will be broken down into a high level of detail which includes information such as account number, account type, responsibility, balance, credit limit, past due, remarks, payment status and more. This is where most creditors will look to highlight any problems such as a history of late payments, missed payments and overuse of credit.
The public history section of your credit report is a short summary of any past bankruptcies, court judgments and tax liens. The information here can vary between states, but most of the information is readily available upon request outside of your credit report. Whilst this section may be brief and easily accessed, it can also contain damning details which can scupper the chances of being accepted for credit. Most information here will be kept for between 7 and 10 years, but it’s highly advisable to keep it blank at all times.
For two years, your credit report will also feature the name and details of past credit inquiries. Common bodies to see on this list include creditors, mortgage brokers, employers and businesses; as they may have accessed your credit report prior to engaging in business with you. Keeping this list as small as possible is in your best interest.