How to Read Your Credit Report
So, you've got a copy of your credit report -- now, what are you looking at? Although the report formatting differs between the three credit bureaus, there are four common sections contained in every consumer credit report:
Identifying Information
This section tells lenders who you are -- name, address, social security number, birth date, and more. Because of life's changes (marriage, change-of-address, etc.), you may find multiple versions of this information. You should verify that this information is accurate. Inaccurate identifying information may result in merged files which are hybrids that contain information on you, as well as someone else. Many consumers who think they are victims of ID theft are actually victims of merged files.
Credit History
This is the "meat" of your report. It contains a listing of all your credit accounts, sometimes referred to as "trade lines." Accounts in good standing are usually tagged with the words "pays as agreed" or "never late." Each account lists the following information:
- When the account was opened;
- Account type: installment or revolving;
- Individual or joint account;
- Your credit limit;
- Your current balance;
- Minimum monthly payment amount;
- Highest balance ever reached on the account;
- Current status: open, closed, collection, charge-off, late 30, 60, 90 days;
- Payment history, usually going back three years;
Inquiries
When creditors look at your credit report, they leave a record of their visit. There are two types of creditor inquiries. One is a "soft" inquiry, which doesn't affect your credit score at all. Soft inquiries are done to see if you meet a lender's basic criteria before sending you a "pre-approved" credit offer; they also include "account reviews" by creditors with whom you already have accounts. Checking your own credit report is considered a soft inquiry, too. The other type of inquiry is "hard," so termed because it can affect your credit score. This inquiry is done when you initially apply for credit -- too many hard inquiries in a short period of time can lower your credit score.
Public Records
Any information about public records such as bankruptcies, liens, foreclosures and divorce are listed here. While most credit information stays in your file for seven years, be aware that bankruptcies and foreclosures will remain for up to ten years.
Remember, the credit reporting system is voluntary: Creditors choose which (if any) of the three credit reporting bureaus receive your information. Thus, it's a good idea to view your report from all three bureaus -- Experian, Equifax and TransUnion.