How to Read Your Credit Report
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How to Read Your Credit Report

Your credit report impacts many aspects of your business. Here’s how to get a free copy and read your credit report.


Your credit report is a detailed snapshot of your financial life. What is your credit report used for? If you’ve ever applied for a loan or a credit card, the decision about whether to approve you was largely based on the information in your credit report. Some employers check the credit reports of prospective employees, as do many landlords, and companies considering doing business with someone.

Given the importance of the information, it’s crucial to be able to read and make sense of what your report includes. Of course, in order to read it, you have to have it. By law, you’re entitled to a free copy of your credit report from each of the three major credit bureaus, Experian, Equifax and TransUnion, once a year. You can order your free credit report online or by phone at 1-877-322-8228.

If you have an ITIN (Individual Taxpayer Identification Number), you can request a free copy of your credit report by mail from Experian.

Reading Your Credit Report

Once you have the three reports in hand, it’s time to delve into the alphabet soup of abbreviations, terms and numbers to see what they’re actually saying about you.

The first thing you’ll notice is that each of the credit reports have slightly different information, which is why experts suggest you order all three. Reporting is a voluntary system set up between creditors and the credit bureaus; this means creditors can supply information to whichever agency they want, or to all of them, or none of them.

The basic setup, however, is the same. Each report will contain information that identifies you, your credit history, public records and any inquiries that were made about your credit.


Identifying Information

This is just what it sounds like: information that identifies you and is specific to you. This includes your name, Social Security number, past and current addresses, birth date, phone numbers, driver’s license numbers, your employer, and your spouse’s name.

You may notice different spellings of your name or an address that isn’t exactly right, e.g., it says “Road” instead of “Drive” for a street name. Usually, that’s because it got reported incorrectly to the credit bureau. Unless the names, addresses, or other personal information aren’t related to you at all, it’s nothing to be concerned about. If there’s something on there that’s very wrong, then contact the credit bureau to clear it up.


Credit Summary

This is the meaty part of the credit report: a listing of all the accounts ever connected to you. These entries are sometimes called trade lines, and each will have the name of the creditor and your account number, which may be scrambled or shortened for security. This section is divided into accounts that are currently in good standing and those that are delinquent or potentially negative in other ways, such as having had late payments or going over your credit limit.

For each account listed, the information will include the type of credit it is (such as an installment loan like a mortgage, for example, or revolving credit like a credit card); whether it’s an individual or joint account; the total amount of the loan or the credit limit on the card; how much you currently owe; if you are past due (and if so, by how much); the monthly minimum payment due; the date the account was opened; whether it is still open (or inactive or closed); and how well you’ve paid.

The listing will also show the most recent date the account information was updated by the creditor and any remarks the creditor has made about your account. If an account went into collection, it may appear here or in the next section that details items that are part of the public record.


Public Record Information

This is where legal issues related to your financial situation show up. These are items like bankruptcies, foreclosures, judgments and liens against you, wage garnishments, and in some states, overdue child support. Depending on the nature of the information, a public record can stay on your report for between seven and ten years, and can negatively impact your credit rating.


Credit Inquiries

This is a listing of anyone who’s accessed your credit report within the past two years. It will include so-called “soft” inquiries made by lenders for promotional purposes, such as when you get a pre-approved credit card offer, along with “hard” inquiries made by a lender or creditor when you apply for a loan or line of credit. If you notice any hard inquiries that were not initiated by your application for a loan or credit, then call the credit bureau to let them know.


Credit Report Codes

Frequently, the information in the report won’t be spelled out in long form, but will appear in code. TransUnion has a list of credit report codes that can help you figure out what they stand for.


What if the Report Isn’t Correct?

It’s important to check your credit report to make sure the information is accurate because so much depends on it, including your credit score.

We mentioned this a couple times already, but it bears repeating: if you find a mistake, bring it to the credit bureau’s attention immediately. The Fair Credit Reporting Act says the credit bureau must correct inaccurate information in your report. They will investigate and confer with the creditor about any disputes.


Is My Credit Score on My Credit Report?

Your credit score is NOT part of the free credit reports provided by the nationwide credit bureaus. However, you will usually be offered the option to purchase the information regarding your credit score for a nominal fee.


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