Saturday, April 17, 2010

How to Read a Credit Report

In this age of increased identity theft, all consumers should check their credit report on an annual basis. Consumers are entitled to receive on credit report from each of the three major credit reporting agencies (CRA) each year at no charge. By going to the Annual Credit Report website, consumers can receive their credit report from Equifax, Experian and TransUnion. If a consumer is looking at a credit report for the first time, they may be a bit confused. Understanding how to read a credit report helps consumers interpret the information contained in their credit bureau report.

Browse over your credit report in its entirety. You may have your credit report in electronic format or a printed copy. By looking over the credit report from top to bottom, you are able to gain a basic idea of the type of data included in the report. After reading it all, you are now prepared to take a more detailed look of the report.

Verify that your contact information is listed correctly. All three of the major credit bureaus will present the information in different orders put typically your contact information is near the top of the report. In addition to your current address, previous addresses as well as employer information may also be listed here.

Review your credit summary. The credit reporting agencies will typically list a summary of your credit report following your contact information. This information may be broken down by type of debt – real estate, revolving, installment and collection accounts. The summary of accounts will include the total number of accounts that you have (both open and closed) as well as the current total of your outstanding debt.

Read the Public Records section if you have data listed there. Not all consumers will have public record information. Public records include judgments, liens, bankruptcy and sometimes delinquent child support.

Look at the information included in the Credit Inquiries section. A credit inquiry is made when you apply for credit. Some credit reporting agencies will also include information in this section from companies that have looked at your credit in order to extend you an offer. Your current creditors may also look at your credit report from time-to-time and this may also appear in this section.

Read through your entire Account History section. All (or the majority) of your credit accounts should appear in this section. The creditor name, a partial account number, the type of account, the account status, the balance information, payment status, account status and miscellaneous comments can be included in this section. The months and dates listed underneath the account summary show how the creditor has reported this account. If you have delinquencies, they will be showed in this section.

Compare the data in your account history to the legend to interpret the specific information included in your report. The legend typically appears at the bottom of the credit report.

Read the full original article here.

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