Easy-to-Follow Credit Report Format
Credit reports are now provided in a consumer-friendly format…
No other document contains as much information about your borrowing and spending habits as your credit report. It’s the main factor in determining if you qualify for a loan or credit card and it guarantees the interest rate you’ll receive once your approved. Plus, there’s many other people check your credit report besides lenders >>> Up until a few years ago, understanding your credit report required a great deal of time and effort. But a variety of changes have been made to provide a more consumer-friendly format. These days, understanding your credit report is easier than ever. Credit reports are now broken down into four major sections:
1.) Your Personal Information:
All your identifying details are included in the ’Personal Information’ section including your social security number, current and previous places of residence and employment. It’s not uncommon to find errors in this section. Your name may be misspelled or more than one variation may be included. Don’t panic! This information is provided by your creditors and sometimes gets lost in translation. But, there is cause for concern if an entirely different name, address or SSN is on file which may be a sign that your identity has been stolen.
2.) Your Credit History:
This section requires extensive scrutiny. It includes details on every form of credit you’ve ever had, including mortgages, auto and personal loans, as well as credit and debit cards. Information on each loan is displayed: open / closing dates, length and type of loan, late payments, interest rates and default payments and accounts. A rather common occurence is to find someone else’s credit information on your report. This typically happens with family members who share the same last name. For example, it’s not uncommon for a father’s loan information to appear on his son’s credit report.
Entries in this section include the following information:
• The name of the lender and account number
• When the account was opened
• Whether it is an installment account (such as a car loan) or a revolving account (such as a credit card)
• Whether the account was opened with another person
• The account’s credit limit and your outstanding balance
• The size of the monthly payment
• Whether the account is still open, and if not, who closed it
• The number of delinquencies on the account
• Whether the account went into collection or was written off by the creditor.
3.) Public Records:
This is the section that can do you the most harm as it includes all public filings such as past judgments, liens and bankruptcies. Any convictions may also be included here such as driving under the influence. Here you’ll find a line-by-line description of every defaulted creditor account that has been reported to the agency.
4.) Account Inquiries:
The last section of your credit report lists the companies that have requested a copy of your credit report. There are two types of inquiries:
Hard inquiries: Includes all requests you’ve made for your credit report and any applications for new credit; including credit cards, loans or even cell phone contracts.
Soft inquiries: Includes inquiries that are done without your consent by any company that wants to sell you something such as a new line of credit.
The number of inquiries is factored into the formula that determines your credit score. A large number of hard inquiries is seen as a negative in that you may be taking on too much credit. However, scoring companies understand that consumers may need to make a number of inquiries in a short span of time when shopping for mortgages or car loans, and they factor that into the scoring accordingly.
Why You Should Check Your Credit
A National Association of State Public Interest Research Groups conducted a study of 200 adults in 30 states and had them review their credit reports for inaccuracies. The results included the following errors:
•75% of the credit reports contained some kind of mistake.
•54% contained personal, demographic, identifying information that was misspelled, out-dated, belonged to a stranger or was otherwise incorrect.
•30% included accounts that had been closed by the consumer but incorrectly remained listed as open.
•25% had errors serious enough to result in the denial of credit.
There’s many reasons to check your credit report. Thanks to federal laws enacted in 2005, you’re entitled to one free credit report per year >>> . Another great option is to consider ‘credit monitoring’ which will alert you to any unexpected changes listed on your report. This could help prevent or reduce the damage caused by identity theft.
See our complete list of credit monitoring services >>>
