How to Read your Credit Report
Your credit report contains a wealth of information about your financial actions. If you have credit or loan accounts, those accounts, and how you pay them, are included in your credit report. It’s important to review your credit report at least once a year so you know what your creditors are saying about you.
Understanding your credit report can be confusing, especially if you’re reading it for the first time. Here is a breakdown of the types information contained in your report.
Personal Identification Information
Personal information including your name, address, and place of employment is used to identify you. Previous addresses and places of employment might also be included.
It’s not uncommon to have variations or misspellings of your name. Most credit reporting agencies leave these variations to maintain the link between your identity and the credit information. Having different variations of your name and old addresses won't hurt your credit score as long as it's actually your information. Make sure personal information is identifying you and not someone else. If you see addresses and names that you don’t recognize, try disputing this information first, and consider placing a Fraud Alert on your credit reports.
The credit summary section of your credit report summarizes information about the different types of accounts you have. This section lists the total number, balance, number current, and number of delinquent accounts. It will include the following account types:
The summary includes the following information for each of the five types of accounts---
This section also summarizes your open accounts, closed accounts, public records, and inquiries---
The account history section of your credit report contains the bulk of the information. This section includes each of your credit accounts and details about how you've paid. Your account history will be very detailed, but it's important that you read through to make sure the information is being reported correctly.
Each account will contain the several pieces of information.
The Lender Industry code used in your credit report can also impact your credit score. Certain types of accounts can be labeled as "Consumer Finance Accounts" Too many of these types of accounts can cause a score to drop.
Here is a table with the industry codes for transunion, as reported by Freddie Mac:
Your 24 Month Payment History will be listed on the account. For each month of reporting, you will have a code. The codes are:
Keep in mind that different creditors report information in different cycles so some information, such as the balance listed on your account, may not be totally up-to-date. This is OK as long as you have verified that it is an account that you recognize and that the information listed was accurate at some point in the recent past. If you don't see this type of information update over time it is a good idea to contact your creditor to see if there are any problems with your account or ask what schedule they report your account information to the Credit Reporting Bureaus.
Correcting Errors: Credit reports often contain mistakes that lower the subject's credit score. Perhaps the most common is the inclusion of someone else's accounts which can also be known as a "merged file". Sometimes, half of the borrowers accounts are missing, this is known as a "split file". If this is happening to you, you will have to contact the bureau directly in order to fix the reporting error. Borrowers who find mistakes must take the initiative to get them fixed, which means writing to the Credit Reporting Bureau reporting the erroneous information and detailing the particulars of the error.
Under the Fair Credit Reporting Act (FCRA), a Credit Reporting Bureau has 30 days from the day it receives your dispute to complete its investigation and report back to you, the borrower. The report must indicate that the error was corrected, or there was no error, or the credit grantor did not respond, in which case the disputed item is dropped from the report. For more information about correcting errors, feel free to visit the Rebuilding Forum.
Because fixing errors takes time, it is a good idea for borrowers to check their credit well in advance of entering the credit market or applying for an important loan such as a mortgage loan or auto loan.
Public records include information like bankruptcies, judgments, tax liens, state and country court records, and, in some states, overdue child support. Depending on the type of account, a public record can remain on your credit report between 7-10 years. Only severe financial blunders appear in this section, not criminal arrests or convictions. Because public records can severely damage your credit, it's best to keep this section clear.
If a prior judgment has been DISMISSED, or VACATED, you can have this Public Record account removed using the Dispute process. A SATISFIED Judgment can remain on your report and causes the same FICO effect as an un-paid judgment.
For each public record, some or all of the following information may appear---
If the Public Record is a Bankruptcy, three other fields will be visible---
The INQUIRY INFORMATION section lists details about each inquiry that has been made into your credit history. Details include the name of the creditor or potential creditor who made the inquiry and the date when the inquiry was made.
An inquiry appears when an organization such as a bank or retail store requests a copy of your credit report. These requests can only be made if you have a credit granting relationship or are applying for credit with the organization. The requestor's name will appear on your credit report, allowing you to monitor who accessed your credit report.
Please Note: An excessive number of inquiries may adversely affect your creditworthiness. However, inquiries you personally have made via AnnualCreditReport.com or MyFico.com are considered to be “soft inquiries” that will not negatively impact your credit standing.
If you have never seen your Credit Report,
Start with pulling your FREE Credit Report's from annualcreditreport.com. They tend to have more info on them than ones from a 3rd party. The Credit Reports from annualcreditreport.com, come directly from each of the CRA's. You can pull 1 Free Credit Report from TU, EQ and EX every 12 months.
Save your money and Don't Buy the Scores, they are what we call FAKO's.
Best of Luck to Everyone, as they start / continue their Journey!
Awesome work! If you'd like me to add it to the stickies or lock it or whatever, holler.
I vote for a sticky!
One statement made on this sample report focuses on a common problem experienced by many consumers when dealing with collections.
It is a common criticism that debt collectors are reporting monthly account delinquencies, when they in fact cannot.
That often results from a poorly formatted commercial credit report, such as the one provided, which makes the clear statement under Account History that:
"Collection accounts may appear as part of the account history or in a separate section. Where it appears depends on the company providing your credit report."
Such a practice creates tons of confusion. I see no reason why any commercial credit report would have a problem of clearly delineating collections from accounts of a consumer. They are stored in entirely different segments of a consumer's credit file.
How do you read and understand a crummy credit report?
Posting a link for anyone faced with an Equifax credit report in raw form (such as I got when applying for a car loan). It's aimed towards corporate types in the industry and as such is a little challenging for a consumer to wade through, but it's pretty detailed from one of their corporate slide decks and may be useful for 3rd party sites too.