Reading A Credit Report Basics

There are a few basics to reading a credit report. To begin with, it’s important to know that there are three major credit-reporting agencies and that each one can have a different report. These agencies, Experian, TransUnion and Equifax will each have a slightly different way to report the information about you and your credit. Not all lending institutions will report to all three credit-reporting agencies. So it is a good idea to look at all three agencies reports.

A basic rule for reading a credit report is to get a report from a company like annualcreditreport.com because they will include the reports from all three agencies. The reports that you get from these agencies will be more consumer friendly than a banks credit report. It contains all the same information, but it is easier to read when it’s not from a bank.

Another basic thing to know when you are reading a credit report is that there are four basic parts to the report. There is the identity part, the credit history part, the public records part, and the inquiry part. All four parts make up the credit score you have, but the basic part of your credit score comes from the credit history part.

Reading the identity part of a credit report will be relatively easy. The basics here are that it identifies you form any one else. Well, hopefully you are not confused with any one else on your credit report. Look over this part and make sure that your information is correct. You may find your name misspelled here or there, this is only because that is how some lending institution reported it and it stays there so the “trail” of who you are is not disturbed.

When you are reading the next part of a credit report, the credit history part, you will want to know some basics of how they report the information. This portion of the credit report will contain the accounts that you have and all the information you could possibly think of that relates to each account. There are lenders names, account numbers, original start dates, delinquent payment records, and a lot more.

The basic thing to know how to read here is the current or delinquent column, what the payments are and when they will end, the terms of the loan and if you are the only person on this loan. There will also be nice row of hopefully low numbers. These numbers indicate whether or not you pay on time or a few days late. The numbers are from 0-9 and there is a number for each month you have had the account open. Having a 0 is the best, indicating that you always pay on time. There may be no numbers, but an explanation instead. The explanation may be, “always pays on time” or “pays 30 days late.”

The basics of reading a credit report will go on to the next section of the credit report. This is the public records section and this is where any bankruptcies, tax liens, judgments, or collection accounts are found. The basic idea here is to have nothing to read. You do not want to have anything in this section of a credit report.

The last basic portion of a credit report is the inquiry section. This section lists all the inquires that have been made about you and your credit history. This will have an affect on your credit history and therefore your credit score, but it is not the basic part of the credit score. Lenders just like to see who has been looking into your credit history.

So the main basics for reading a credit report are read the reports from all three credit-reporting agencies. Then know what you need to look for and check it on your credit report, like the credit history. Know what the letters and numbers mean and make sure you check all the information in the credit report.