Video:How to Read a Credit Reportwith Don Schechter
You don't need to hire an expert to decipher the details of your credit report. Learn the ins and outs of credit reports, and learn how to report mistakes on your report.See Transcript
Transcript:How to Read a Credit ReportHi, I'm Don Schechter for About.com Money. Today I will show you how to read your credit report.
What is a 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.
Reviewing Credit ReportsIt's important to review your credit report at least once a year so you know what your creditors are saying about you. Remember, you can request your credit report for free annually. Understanding your credit report can be confusing, especially if you're reading it for the first time. Here is a breakdown of the type information contained in your report.
Personal Information in Credit ReportsPersonal information including your name, address, and place of employment is used to identify you. Previous addresses and places of employment might also be included. Its 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. Make sure personal information is identifying you and not someone else.
Credit Accounts in Credit ReportsThe Account History or Credit 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. It will be very detailed, but it's important that you read through to make sure the information is being reported correctly.
Information in Credit AccountsEach account will contain the several pieces of information including:
- Company name of the institution reporting the information
- Account number associated with the account. The account number may be scrambled or shortened for privacy purposes
- Type of account, i.e. revolving account, education loan, auto loan
- Terms of repayment. Installment loans include the number of payments. Revolving accounts may leave this section blank or as revolving
- Date opened. The month and year the account was established
- High Balance is the highest amount ever charged on the credit card. For installment loans, high credit is the original loan amount
- Credit limit or loan amount
- Balance. The amount owed on the account at the time data was reported
- Status. Indicates the status of the account, i.e. current, past due, charge-off. Even if your account is current, it might contain information about previous delinquencies
- Account history. Indicates your monthly payment status since the time your account was established
- Last reported. The last time the data was updated by the creditor
Public Record InformationPublic 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, its best to keep this section clear.
See Who's Accessed Your Credit ReportCredit inquiries or requests list all parties who have accessed your credit report within the past two years. While your version of the credit report lists several inquiries, not all of these appear on the lenders and creditors versions.
Only hard inquiries are shown to lenders. These are inquiries made when a lender checks your credit report to approve your credit application. Your version will also include soft inquiries consisting of inquiries made by lenders for promotional purposes.
Report Mistakes on a Credit ReportIf you find a mistake on your credit report, you have the right to have it corrected. You can do this by disputing the information with the credit bureau. Your credit report will come with a form or instruction sheet guiding you through the dispute process.
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