How to Read a Credit Report

Elements of a Credit Report

Under the Fair Credit Reporting Act (FCRA), you are entitled to a free copy of your credit report every 12 months. However, it can be daunting and confusing to examine your report if you don’t know how to read through the information listed. Although the exact format will vary between the three main agencies– TransUnion, Equifax and Experian— your credit reports will contain the same information.

What’s On Your Credit Report?

Regardless of the layout, there are four main sections that will appear on your credit report: personal information, public records, creditor information, and credit inquiries. We’ve broken each section down to explain what it may hold and how to understand what’s on your credit report.

Personal Information

This information is only used for identifying you. This information is not considered in scoring models when calculating your credit score. The information listed in this section will include:

  • Name and any aliases
  • Current address
  • Previous address(es)
  • Date of birth
  • Social security number
  • Employment data

Public Records

This section includes open legal issues regarding your finances. The information here can negatively impact your score, and most of them can stay on reports for at least seven years (bankruptcies can remain for 10 years). These records might include:

  • Tax liens
  • Bankruptcies
  • Civil judgments
  • Wage garnishments

Creditor Information

All existing lines of credit are included in this section, including any credit that’s been turned over to a collection agency. Generally speaking, these accounts will be categorized as Open, Negative, or Closed.

Credit Inquiries

This section will list the business names of who has obtained a copy of your credit report, along with the business’ contact information, the date of the inquiry request and the type of business the company runs. Such entities may include:

  • Lenders
  • Landlords
  • Employers

Hard inquiries are the result of a transaction initiated by you. This would be when you submit an application for a credit or housing, auto or other loan. Hard inquiries might lower your credit score if too many requests are made within a certain time frame. These will remain on your credit reports for two years.

Soft inquiries result from transactions that you either didn’t initiate (like a preapproved offer or an existing creditor monitoring your account) or from a transaction that won’t affect your credit score (such as employment, insurance or you requesting your own report). Soft inquiries can occur without any action made by you, but they will not affect your credit score nor will they appear when a company requests a copy of your credit report.

Dispute Errors on Your Credit Report

It happens; errors sometimes appear on credit reports. That’s why regularly monitoring your reports can help you resolve the issue sooner rather than later. One small error on your credit report can cause serious damage.

Be sure to verify that every bit of information is correct; an error, such as a wrong address or a misspelled name, could be the result of the credit bureau mixing your file up with someone else’s, or worse, a sign of identity theft. To review your credit reports with an attorney, fill out your free case review now or give us a call at 1-877-735-8600 today.