How To Read Credit Reports

Why is it important to be able to read credit reports and understand what it says about your credit history? Your credit report ultimately determines whether receive the credit or not, and the terms you will have to pay.

Lenders usually check your 3-in-1 Credit Report, which is the most complete picture of your credit history available. With data provided by all three national credit bureaus (Experian, Equifax, and Trans Union) they can get the full story on your payment history.

Learning how to read credit reports is also important because you need to check the information in your credit file for accuracy. Information on most credit reports contains details for the previous seven years, but bankruptcies may show up for ten years, so it's really important to check for errors. Some things to check for are:

  1. information from someone with the same name as you
  2. possible credit card fraud
  3. debts that have actually been paid off, but still show a balance due
  4. employee or address information that is incorrect or that has changed.

Below is a sample of a TransUnion credit report detailing the various sections of the report. Equifax and Experian offer similar information.

Personal Information

Name:
Other Names: (including maiden names and other derivatives of your name)

CURRENT ADDRESS

Employment Data Reported
Employer Name:
Position:
Hired:
Date Reported:

SSN: (Your social security number)
Date of Birth:
Telephone

PREVIOUS ADDRESS:
(Any previous addresses that may be on file, and the date that they were reported)

Public Records

Type: (What type of public record)
Reference Number: (to look up the records)
Court: (Where the information is filed)
Status: (Paid or current)
Date Filed: (When the record was filed)
Responsibility: (Joint or individual responsibility)
Plaintiff: (Who filed the record)
Amount: (How much is owed)
Release Date: (Date it was paid off) Remarks:

Public record items are obtained from local, state, and federal courts. These may include bankruptcies, suits, judgments, and tax liens.

Account Information

Issuing Bank and Account #
Address of issuing bank

Loan Type:
(Mortgage, credit card, finance)

Pay Status:
(Paid, paying as agreed, delinquent)

Account Type:
(mortgage, revolving, installment, collection)

Responsibility:
(joint or individual, authorized user, co-signer, terminated, etc.)

Date Opened:
(When account was established)

Current Balance:
Date Updated:
High Balance:
Credit Limit:
Terms: (Credit card minimum payment, mortgage payments, or loan payments)

Late Payments: (Number or times that you have paid 30, 60, and 90 days late for the history of the account)

Record of payment recorded for previous months

Inquiries

Company
Address of company
Phone number:
Date Requested:

Promotional inquiries are companies that receive limited information about you so that they can make an offer of credit or insurance. They don't receive your full credit report, and these inquiries do not affect your credit score.

Personal inquiries and credit monitoring services also do not affect your credit score.

Hard inquires occur when you apply for credit with a company. Too many hard inquiries can hurt your credit score.


Resolving Inaccurate Information on your credit report:

If you find errors on your credit report, you can start an investigation to correct the information. The following article on fixing a credit report mistake can help you get the process started.

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Now that you know how to read credit reports, the following articles can give you more helpful information to help you manage your credit: