How To Read A Credit Report

There are times when you need you credit checked. Then there are times when your credit report doesn’t seem right. Learning how to read a credit report can be very helpful if you suspect something wrong with your credit report. Knowing how to read a credit report can also help you when you want to get a loan, or a just want to make sure everything is correct.

There are a few ways you can get a credit report. Get one through a bank is one option. These reports are harder to read and understand. You can also go to web sites like annualcreditreport.com and get a free credit report every 12 months. These credit reports are consumer friendly and easier to understand when you read them. You can get a report from each on the three major credit-reporting agencies.

You will want to look at each of the three major credit-reporting agencies reports because they may have some different information. Lending agencies have the choice of which reporting agency they want to report to, so not all three will be the same. Learning how to read a credit report, starts with learning that there are three you should read.

Now you will need to know what is on the credit report and what it all means. First section of the credit report is the identification section. This section simply identifies whom the report is about. It will include your name, where you live, social security number, spouse, telephone numbers, driver’s license numbers, date of birth and maybe a few other bits of identity. Look at this information closely and make sure it is you and it is correct.

The next section is the main part of the credit report. How to read this part of the credit report may take a little more know how. The credit report will have your credit accounts, opened and closed, listed here. The credit report will have the name of the lender or creditor, the open date of the account, any kind of late payment record, who holds the account, the terms of the account, the account number, the balance due, the status and activity of the account. The name account number and most other lines and columns are easy to read and figure out.

Most of this is in plain English on two of the reports, but there are some abbreviations that will be helpful when reading a credit report. Knowing how to read the abbreviations for who holds the account is not too hard. “I” indicates individual. “U” undersigned. “J” joint. “A” Authorized User. “M” Maker. “T” Terminated. “C” Co-maker or co-signer. “S” Shared. Some of the credit reports will have the word written out and not just the letter; so don’t stress it too much. Most account will be I, J, or U.

The next thing you need to know how to read on a credit report is the markings for the status of the account being reported. An “O” stands for an open account. An “R” stands for a revolving account, like a credit card or department store card. An “M” will indicate a mortgage. An “I” will indicate an installment status on the account. These are mostly for those that are not sure what you have done with your credit life. Then there are numbers from 1-9 that will indicate if you are current on your payments. A 1 is what you want. There will be a number for each month that the account is opened. Make sure you don’t have any 9’s reported if you have always paid on time.

How to read the rest of a credit report is not too bad. You have a section for accounts that have had to have collections or go to the courthouse. You want this part blank on your credit report. If it’s not then the information that is there is usually pretty easy to sort through.

The last section of a credit report is the inquiry history. All the inquiries or credit checks that have been made and who has made them and on what date they were made will be listed here. That is how you can read a credit report and understand what it is saying.