subject: Learn How To Read Your Credit Report [print this page] It's quite easy to order your credit report but once you get it, do you know how to read it? Here we will give you the knowledge you need to accurately read your report. Most people order a credit report from one of the three bureaus, look at their credit score, and then either surmise that they have poor credit or great credit based solely on the three-digit score. To this effect, very little gets accomplished.
You need to understand how to read your credit report to ensure your credit is in good shape. Many people think that their credit score is the end-all when it comes to determining whether they have good credit or bad credit.
If you are a consumer who has a single credit card that they've paid on time each month for the past five years. You may have a good credit score because you've got no derogatory accounts, but with only one credit card to their name, and no other loans, your credit depth would be considered very shallow.
So anyone thinking about offering them a sizable loan would probably think twice despite the high credit score. All that said; let's look at what a credit report consists of. Please note that the order and contents below may be in a different order on different credit reports, and that no two credit reports are the same.
There are hundreds if not thousands of different credit reporting agencies that each have their own unique formats. The information on the top of the first page of a credit report will include the borrower name, current address, social security number, and date of birth. It will also include the information of a spouse if it a joint credit report.
The next section will show the summary of the credit report, including all three credit bureau scores, late payment history for the last 24 months, total number of accounts, account history, total available credit, and the total percentage of available credit.
This section is a quick way to see what the mid-score is, how many late payments the borrower has, how much credit a borrower has, and what percentage of that credit is available. The following section displays any mortgage information. It will usually include both derogatory accounts and accounts in good standing.
Starting in this section you'll see a series of columns with specific information detailing each account. This is usually made up of two sections, each containing all your consumer accountsthat aren't mortgages, including auto loans, credit cards, collections, charge-offs, and other credit lines.
The first section shows the accounts that are derogatory, and the second section shows the accounts that are in good standing. The next section shows more detailed information from all three credit bureaus, detailing why the score is reporting at a certain level.
Here you'll see comments from each bureau, ranging from something such as "length of time accounts have been established" to "too many inquiries in last 12 months". After that is a list of any recent credit inquiries, including the date, creditor, loan type, and bureau reporting.
If you see a large amount from all types of different creditors for different transactions, your credit score was probably adversely affected. While it doesn't hurt to pull credit from multiple like lenders, if you have multiple inquiries from unrelated creditors, it can send out a warning to other creditors that you're desperately or aggressively trying to borrow.
This will lower your credit score. Any discrepancies the credit bureaus might report, such as social security issues or fraud alerts are shown as well. There is a section that shows a hierarchical list of where you may have lived in the past decade.
Your employment section is important, as it shows a list of recent and present employers. This section can be viewed by underwriters to determine if you have job stability, or if you really make what you may claim.
The final section of most credit reports lists the three bureaus addresses and phone numbers. It's a convenient place to find contact info if you need to dispute anything with the credit bureaus. Hopefully now you have some knowledge of what is on your report and why.
