Your credit report affects whether you are approved for loans, credit cards, apartments and sometimes even business financing. Yet many people have never read theirs from top to bottom. The format can look intimidating, but once you know what each section means, a credit report is fairly easy to follow.
This guide walks through a typical report section by section and shows you what to check along the way.
Start by getting all three reports
There are three nationwide credit bureaus: Equifax, Experian and TransUnion. Each keeps its own file on you, and they do not always match, because not every lender reports to all three. You can get free reports from all three bureaus every week at AnnualCreditReport.com, the official site for free reports.
Pull all three at once so you can compare them side by side. Keep copies, and plan to check them regularly, not just when you are about to apply for something.
Personal information
The first section lists your name and any variations, current and past addresses, date of birth, part of your Social Security number and sometimes employers. This information identifies you; it does not affect your score directly.
Still, read it carefully. Unfamiliar addresses or name variations can signal a mixed file (another person’s information combined with yours) or identity theft. Note anything that does not belong.
Accounts (tradelines)
This is the heart of the report. Each credit account, often called a tradeline, appears with details such as:
- Creditor name and account type: credit card, auto loan, mortgage, student loan and so on.
- Date opened and, if applicable, date closed.
- Credit limit or original loan amount.
- Current balance as of the last report from the lender.
- Account status: open, closed, paid, in collections or charged off.
- Payment history: usually a month-by-month grid showing on-time payments and any late payments.
For each account, ask yourself: Is this mine? Are the balance and limit correct? Does the payment history match my records? Is an account I closed still showing as open? Is a debt I paid still showing a balance?
Collections and public records
Collection accounts appear when a debt has been sent or sold to a collection agency. Check that you recognize the original creditor, that the amount is right and that the same debt is not listed more than once in a way that misstates what you owe.
Some reports also show public records, such as bankruptcies. If anything listed here is inaccurate or does not belong to you, note it for a dispute.
Inquiries
Inquiries show who has accessed your report. There are two types:
- Hard inquiries happen when you apply for credit and a lender reviews your report to make a decision.
- Soft inquiries include checking your own report and certain account reviews or promotional offers. These are visible to you but not used by lenders in the same way.
A hard inquiry from a company you never applied to can be a red flag for identity theft and is worth looking into right away.
How to dispute an error
If you find something wrong, you have the right to dispute it, and you can do it yourself for free. Contact the bureau that is reporting the error, explain clearly what is wrong and include copies (never originals) of documents that support your position. You can also contact the company that supplied the information.
Under the Fair Credit Reporting Act, credit bureaus generally must investigate a dispute within 30 days. Keep copies of everything you send and receive, and follow up if you do not hear back.
One important point: accurate, current and verifiable information cannot legally be removed from your report, even if it is negative. Be cautious of anyone who promises to erase accurate information. The Federal Trade Commission’s consumer site, consumer.ftc.gov, has helpful guidance on your rights.
Know your rights with credit repair companies
Federal law (the Credit Repair Organizations Act) and Florida law prohibit charging for credit repair before the services are fully performed. You should receive a written contract and a statement of your rights before paying anything.
If you would like help reviewing your reports and handling disputes, our credit repair and credit building services are provided through our partner, T and T Tax Services Inc. You are billed only after work is completed, and no one can guarantee a particular result or score. We focus on accuracy and on helping you build healthy credit habits going forward.
Make it a habit
Reading your credit report regularly is one of the simplest ways to protect your financial health. If you want a second set of eyes on yours, book a free consultation or call (772) 356-3550.
