Your personal credit report will provide you with the most up to date information on your overall credit history, status and score. The amount of information shown can make things quite confusing if you have never read a credit report before. Although the information presented may vary depending on which bureau you receive your report from, all credit reports have the same basic structure.
So, how do you read a credit report? Here we’ll discuss how to read a credit report and fully understand the information presented.
A consumer credit report consists of four sections:
- Identifying Information
- Credit History
- Public Records
- Inquiries
Identifying Information
This section contains your personal information that is used to identify you. For example, you’ll find your name, date of birth and social security number. You’ll also find your address and possibly previous addresses as well. Your spouse’s name and the name of your employer may also be shown.
Credit History
This section will include accounts that you have open with different creditors. Each account is listed as a separate entry, which will include the following:
- The date on which you opened the account
- The type of credit account (installment or revolving)
- The owner(s) of the account
- Total amount of loan or available credit as well as the total amount still owed
- Account status
- Payment information
- Payment history, or how well you’ve kept up with payments
Your credit history shows how responsible you’ve been with credit. Accounts in good standing will increase your credit score, while accounts on which you’ve made late payments or gone over your credit limit will decrease it.
Public Records
The third section, public records, shows any collection action, bankruptcies or tax liens in your name. Any information in this section is going to hurt your credit score. If this section of your credit report is blank, that’s a good sign.
Inquiries
The last section of your credit report shows entries for each time someone has looked at your credit report. There are two types of inquiries: “soft” inquiries and “hard” inquiries. Soft inquiries include those made by you and by people looking at your credit report for background check purposes. Hard inquiries include those made by creditors. Having too many hard inquiries can decrease your credit score, while soft inquiries do not affect it at all.
Having a good understanding of these sections before you read a credit report will help you determine how the information you find affects your credit score. In general, checking your credit report regularly is the best way to see how the way you’re using credit is affecting your overall credit rating.
