How to read a credit report is one of the questions one grapples with as soon as you start receiving your credit report. At first glance, it can leave one confused and baffled some of the things written there might not make any sense to you and you get lost in translation. Let us try to understand it, each pertinent data in your credit report one at a time.
How To Read A Credit Report
Personal Information
One of the things you will find in your credit report is your personal information. It will contain your name and nicknames, address or addresses, current employer and previous employers. These are all information used to identify you.
Credit Summary
This contains important data on all your accounts. It will reflect how many accounts you have, how many of those are delinquent, your balance. It will show your real estate, revolving, installment and collection accounts.
Account History
This is the meatiest part of your credit report. It will contain the details of each of your account like payment. It is important that you read this section thoroughly to make sure there is no error, for example, it might be reported there that you failed to pay when you were supposed to and you have proof that you did, then you can inform the credit bureau about your situation. It will contain creditor name, account number, account type, responsibility, monthly payment, date opened, date reported, balance credit limit, high balance, past due, remarks, payment status and payment history.
Public Records
This contains damaging information like bankruptcies, judgements and tax liens. This does not contain criminal records, but these information can hurt your credit and this is kept 7-10 years.
Credit Inquiries
This is a list of those who have accessed your record within the last 2 years, usually lending companies or employers would like to see this information before they decide to accept you.
Tips On How To Read A Credit Report
First, you should not read only one credit report. It is ideal that you read at least each of the free credit reports you can get from transunion, experian and equifax, respectively. You are probably thinking that any of those companies will do and that their credit report is the same but you are wrong. There will be significant discrepancies mainly because these companies gather their information from different sources, there is a chance that what one has not included or failed to include in their credit report, has been included in another credit report.
Second, the information overload can be overwhelming but look at each item carefully, especially the account history section and public accounts. There might be mistakes or inaccurate data that you need to fix.
Third, do not be alarmed if you have different credit scores in your credit reports, each company has a different way of scoring. However, the FICO score is noted to be the best scoring so far, and it is commonly used.
This is just an introduction to your credit report, the best way to learn it is to actually experience it. Soon enough after a considerable amount of exposure, you will become an expert on how to read a credit report.
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