Understanding a Credit Report

The contents of your credit report play an important role in keeping the report itself on good terms. This document is basically your financial life story, and should be treated as such. It contains the credit score, a number between 300 and 850, which can be used to decide if you deserve a loan or not. More importantly, it shows whether you are responsible with your credit. Needless to say, you need a good credit report to get by financially.

The first part of the credit report will typically contain your personal information. This includes name, phone number(s), social security number, address, date of birth, and your employment information. Next, you will find information on your credit accounts. These include loans and their maximum amounts as well as information on co-signers. Next will be the Inquiries section, which lists people who have asked to see the report.

Some states also require the credit report to provide public record information. Included are overdue payments, bankruptcies, or anything else that might have landed in court. If it is present, this section can keep information present for up to ten years. If there are a lot of negative items present, it can have a very detrimental effect on your image in the report and your ability to get a loan.

Understanding your credit report naturally requires having a copy of it to see what aspects you must work on. If information is outdated or false, send a letter to the bureau to have it corrected. The process can be tedious with many obstacles and follow-up procedures. Still, it’s a good educational experience into the world of credit agencies.

Don’t feel threatened by the process of getting your credit report. You are entitled to at least one for free each year, as written in the Fair Credit Reporting Act (FCRA). The overall process is much less complicated than it might seem. The rule typically applies to the three biggest companies involved: Experian, TransUnion, and EquiFax. Do be aware that if you order more than one report a year, you might then have to pay a fee.

When your report arrives, look it over from top to bottom and examine every detail for mistakes. If you have a common name, companies might have gotten it mixed up with a similar variation of it. Also, keep updated copies of your report on a regular basis. Dispute inaccuracies and handle payments carefully. Make sure to avoid late payments, even if they are the minimum amount.