How to read your 3 credit reports.
This is an example and explanation of the different sections that are present in your credit report. And how you can understand them
By now that you have learned how and where to access your free personal credit reports, it will be just as important the to be able to read and understand them as well as compare them. Although you will get your three credit reports from the three national credit bureaus, Equifax, Experian and Trans Union all in one place, you will probably discover that they differ in the way they organize and format the information. This is because the three credit bureaus are not associated with each other. Even though they maintain the website of annual credit report.com jointly they do not share information the with each other. So not only is the format of the three credit reports different but also the information contained in it. Even if the same credit or reports the same information to all three credit reporting agencies, the time or manner in which the data is updated may differ. A common differences is the reporting of different balance for the same exact account appearing on all three credit reports.
There was a time the credit reports used to be difficult for a normal consumer to read. But with strong lobbying efforts from the consumer forums, the credit reports have become fairly easy to read and understand. This applies to the personal credit reports that a person can order from himself. They have been formatted and streamlined in a way to make information easiest to understand by the consumer. The third-party reports such as those given to potential lenders, mortgage lenders, banks and financial institutions are more confusing and complex because they are specifically designed for the application process. Sometimes consumers manage to get a copy of this credit report from their lenders which throws them off on a lot of things. In order to check the details on your credit report, it is highly advisable that you order your own personal copy online, through mail or over the phone. In case you need to dispute any information in your credit report, you’re going to need a copy of your personal credit report anyway. You cannot dispute your credit report before ordering a personal copy from the credit bureau’s.
While the formatting of the data may differ, the information contained in the three credit reports is essentially the same. The information contained in your credit report is usually comprised of the following:
Every credit report will contain personal information about you such as your name, any alias, date of birth, Social Security number and address. This section can contain variations of your name and address the if they had changed in the past. Sometimes it can be a variation in the name because the consumer different names with different creditors such using a middle name with one and not with another. The credit bureau will maintain a history of all personal information reported. This is nothing to be concerned about as long as you can identify that the name is yours. A history on the personal details helps pinpointing identity theft as well. It is important to review this information for accuracy as this is how your credit file is indexed. A corrupt file missing or having inaccurate information may prevent your file from being pulled resulting in a “no record found” for your would-be creditor or employer. This is especially true if the incorrect piece of information is your Social Security number, name or address. Not all creditors will take the time to investigate your claim of having good credit report when they are unable to locate your record in the first place.
The employment information on your credit file also comes from your creditors. It is not reported by the Social Security Administration, Internal Revenue Service or the Department of Labor. Any and all information that a credit bureau has about your file comes either through public records or your creditors. When you fill out a loan application, you are also required to fill out your employment details in many cases. If the creditor chooses to report this information when he reports to the credit bureau, the credit agency can put it on your file.
It is possible that the employment information on your credit file is not accurate if you have changed jobs recently and have not updated them with your lenders. But this is not so much of a problem as many creditors understand that this section can be incomplete or inaccurate. They also understand that in order to verify your employment they should contact your workplace directly and not rely on what is being reported on your credit file.
In case you ordered your credit score along with your credit report, this number will tell you a good deal about your overall credit worthiness and how your credit report stands. It is a good starting point to know whether your credit is good, bad or excellent. No matter what this number says about you and no matter what your credit report has to say, do not get emotional and do not panic. If your credit score is not great at this point as you probably knew, you can improve it with effort over time and with guidance which is amply provided on this website.
The information contained in this section of your credit report is obtained from public records such as county, state and federal courts and includes bankruptcies, judgments and tax liens. Only court judgments pertaining to civil judgments connected to credit are included in your report. The format may differ from one credit report one, but this section typically includes a file date, case number, a state, jurisdiction, balance and other relevant details.
This section will contain any account that has been sold or assigned to a collection agency for recovering. The collection accounts may not only result from your credit usage but also from other sources such as medical bills, insurance payment and even utility bills when you have fallen behind on his famous. While these payments are not reported to the credit bureaus when paid, not paying them may result in the creation of a collection account which may eventually be reported on your credit report. The type of data that you will see will include the account number, the date of last activity [DLA], the balance owed and the current account status, whether or not the debt has been paid, is being paid or remains unpaid. Sometimes the creditors themselves have internal collection departments. In which case you will see the name of the original creditor listed in the collections section as well.
Revolving account section is probably the one that affects your credit report most. Examples of revolving accounts are credit cards and a certain lines of credit. Revolving accounts also called trade lines and refer to accounts in which the balance goes up and down according to usage. The available credit which is usually set at a limit varies accordingly. Because of the revolving cycle nature of these accounts, the information reported on your credit report will probably vary every month and the also have a variable impact on your credit score. These are the type of accounts that you can manage willfully in a manner and to have the best possible impact on your credit score.
Interpreting and understanding this section is easy. The information listed here usually includes name of the creditor, followed by when the account was reported or updated, the date of last activity, when the account was opened, how much credit was ever used, estimated monthly payment required to keep the account current, the balance and the historical status showing how many 30 days, 60 days and 90 daily payments were recorded.
Unlike credit cards and revolving accounts, these trade lines do not revolve. They open with a fixed amount of balance which subsequently reduces with a set monthly payment until the balance reaches zero. Once the account is fully paid you cannot use the account again and it is closed. Examples of installment accounts include mostly all kinds of loans such as home loans, personal loans, automobile loans and student loan.
The formatting of these accounts is similar to the revolving accounts the only difference being that the monthly payment is fixed and does not change like a credit card. The only exception is probably that of a variable rate mortgage which anyway is listed in another section that deals with your mortgage accounts. The information will reflect a monthly payment obligation as well as outstanding balance at the end of each statement.
All loans that all the secured by a mortgage are listed here. This section will not only list the original mortgage account but also any refinance, as well as other home equity loans and lines of credit secured by a mortgage loan.
This will probably be the last section of the credit file. Inquiries result from someone requiring and requesting access to your credit report. An inquiry on your credit report means that somebody has requested to pull your credit file and view it and will stay on your credit file for a period of two years after which they fall off the record on their own.
There are two kinds of inquiries, soft and hard. Soft inquiries have no impact on the credit score well is hard inquiries to. However, this is something that is dealt with another section on the structure.
This should give you a basic understanding of the kind of information contained on your credit report and how to read it. As long as you remember that the data may be formatted and even labeled differently, you are a good place to understand what your credit report has to say about you and whether it’s the reflecting your financial status accurately. Reading and understanding your credit report will help you identify identify the errors and mistakes and the information that you can take off your credit report by filing a dispute.