Monitoring your credit by reading your credit report is the No. 1 step to improving your credit score.
Your credit report offers you a complete view of your current and past credit and financial situation. But without a guide, reading your credit report can seem overwhelming and confusing.
Use our easy-to-follow guide to take the frustration out of reading your credit report:
Section 1: Identifying Information
This section contains:
1. Your name
2. Current address and previous addresses
3. Employment information
4. Social Security number
5. Birth date
You may be tempted to read quickly over this section, but take a minute to ensure everything is correct. For example, carefully look for:
- An incorrect house number on your address
- Outdated employer information
- A SS number off by just one or two numbers
Section 2: Account History
Here’s the meat of the credit report. Your account history will include:
1. Creditor name (i.e., credit card company, mortgage lender, bank)
2. Account number
3. Type of account (i.e., real estate, auto, educational, credit card)
4. Date opened
5. Last activity
6. Balance (how much you currently owe)
7. High balance (the most you’ve ever owed on the account)
8. Past due (amount of overdue payments since the most recent reported activity)
9. Terms (amount of monthly payments, for example)
10. Status (i.e., closed, open)
11. Any additional remarks
Take extra time to ensure everything in this section is accurate and up-to-date. Any incorrect information should be disputed with the 3 credit reporting agencies: Experian, Equifax and TransUnion. Any accounts that are open but inactive should be closed.
Section 3: Public Records
Here you will find a list of all public record items from federal, state and local courts, including bankruptcy, tax lien, monetary judgment and civil action judgment records. Information provided will include:
1. Type of public record
2. Status
3. Date filed
4. Reference number
5. Closing date
6. Court
7. Amount
8. Any additional remarks
You should also take care to ensure all of the information here is correct, particularly if a case was dismissed or if you have been cleared of any charges. Again, contact the 3 credit reporting agencies to dispute inaccurate information.
Section 4: Credit Inquiries
This section will highlight all the inquiries that have been made into your credit report. If you’ve applied for a credit card, load or even a new job, those inquiries should be listed here. Keep in mind that inquiries can only be made with your permission. This section will provide:
1. Creditor name
2. Date of inquiry
Keep in mind these points:
- Are there an excessive amount of inquiries on my report? Too many may negatively affect your credit score.
- Are there inquiries that I do not recognize? This could be a sign of identity theft. Take action with the 3 reporting agencies immediately.
Want to simplify the process of reading your credit report even more? Take advantage of a credit monitoring service. You’ll be automatically notified when any changes have been made to your report by any of the 3 reporting agencies.
© Cole for Credit Score Consultant, 2009. | Reading Your Credit Report: An Easy-to-Follow Guide | http://www.creditscoreconsultant.com/188/reading-credit-report/
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