If you don’t know how to read a credit report then this is the place where you can learn about it. If you are wondering how to read a credit report, then don’t fret as we have come to your rescue. We will help you to understand your credit report. After reading this article, you would be able to know about every single thing printed on your credit report, ranging from numbers, terms, and abbreviations. A credit report contains all your financial actions, including information about loan accounts, and how you pay them. Through it, you come to know what your creditors say about you.
You can get one free copy of your credit report in a year by the three major credit agencies in the United States, that are, Experian, Equifax, and TransUnion. You may think that all the three reports would be same. But this is generally not the case. Look carefully and you’ll find that all three would have different details as creditors give credit information to any one company. Also, you should get the credit report directly from the credit agency and not from the bank as it is much more authentic and customer-friendly. Moreover, it is easier to read a credit report as it does not list the numbers of the creditor’s members and other information of the lender.
How to read a credit report
Understanding a credit report is quite confusing, particularly if it’s your first time. But we are here to simplify it for you. A credit report is basically segregated into four categories, personal information, credit history, public records, and inquiries.
- Personal information: The first section talks about the information that helps in identifying you. It includes your name, birth date, telephone numbers, previous and current addresses, driver license numbers, social security number, employer name, spouse name, etc.
- Credit history: The next category is of credit history, which is also called trade lines. It includes the creditor’s name, account number, credit type, total amount of the loan with highest credit limit and available amount that can be used. It also covers the account status and recent payment history.
- Public records: The third section of a credit report is public records, which enlists all your financial data. It covers judgments, tax liens, and bankruptcies. It does not include lawsuits, arrests, and other information like this.
- Inquiries: The final category is of inquiries. It encompasses a list of all persons who asked for your credit report. There are mainly two kinds of inquiries, the hard one and the soft one. Hard inquiries tell when you applied for a credit application. Soft inquiries are done by companies, current creditors, or potential employers who give you new credit offers and monitor your account. Also, the soft inquiries are only shown to the customers, and not to banks.
Now you know how to read a credit report. So go ahead and give it a shot!