In order to get better control of your financial future, it is important that you understand your credit report. With your credit score impacting almost every facet of your life heading into 2015, from your health care coverage, to your car insurance rates, ability to qualify for a new mortgage, loan or personal line of credit. You are advised to get access to your credit report at least once every year. This way, you will be able to monitor how you stand with your creditors. You will also be able to keep a close eye on your financial well being, and also note if there are errors entered in your report. However, most people have a hard time understanding the report, and here is a basic outlay of how to read the report.
There are three main companies that issue credit reports, and these are Experian, Equifax and TransUnion. The three companies may have varying reports, and it is recommended that you get a report from each of them. The information on the reports may be presented in a different way, but the information contained therein can be interpreted in a similar manner. A credit report contains four different sections. These are Personal Profile, Credit history, Public
Records and Inquiries.
This is found at the top of the credit report, and contains your personal information. The report will list you name, social security number, your place of residence, your place of employment, date of birth, etc. They may also list the name of your spouse. It is important that you ensure that this information is accurate. Any information that is not correct may indicate that your identity has been stolen in the past, and you need to report this immediately.
This is an itemized list of all your current, closed accounts, and what are their balances or arrears. The name of the creditor is listed, the account number for each bill, and the amounts. The account number is sometimes incomplete simply for security reasons. There is a column for identifying the nature of the account. This may have the terms: Joint, Individual, Authorized Under, Undesignated, Maker, Shared, Co-Signer, or Terminated. The report will also make a notation of the date when the account was opened, for how long it has been in operation, and the date of the last activity. The report also shows how high your credit limits, and how much you have borrowed. There is a column for terms, which show how many installments you have paid, and what is outstanding.
Finally the next columns show the types of accounts, whether revolving or installment. An installment account has a fixed date of payment, e.g. a car loan; while a revolving account has no ending date, e.g. your credit card account.
This section contains information that is gathered from federal sources. This will include any tax liens, bankruptcies, or other monetary judgments from the courts. This information stays on your record for up to 10 years.
This section shows the parties who have asked for your credit report within the past 2 years. There are two types: Hard, which is initiated by yourself when applying for a loan, and Soft, which is initiated by a third party seeking to monitor your credit status, give you promotional applications for credit, or whenever you ask for your free credit report.