How To Read Your Credit Report
The Fair and Accurate Credit Transactions Act, signed into law on Dec. 4, 2003, gives every American the right to a free credit report every year from each of the three major credit bureaus -- Equifax, Experian and TransUnion.
What the law doesn't do is give every American the ability to read their credit report. Not one word in the law says the credit bureaus have to write it in plain, easy-to-understand language. Go to http://www.ftc.gov and click on consumers then credit and read it for yourself. Hopefully you'll stay awake .
While all credit reports follow a basic format, some vary so what you are about to read doesn't apply across the board. If you didn't get it directly from one of the bureaus mentioned above, your best bet for a translation is the source providing your copy.
Here is the four part skeleton most bureaus use. Part one is your identifying information. This would be information like your name, social security number, previous addresses, current address, date of birth, driver's license number, telephone number, spouse's name and your employer and length of employment. As with all sections, pay close attention because chances are pretty darned good, some of it is wrong.
It is wrong because this information comes to the bureau from a myriad of sources and the bureau doesn't take the time to update or correct it. That leaves you as your own correcting agent.
Part two is your credit history. This is usually the longest part of your report because you probably have had department store accounts, multiple credit cards, multiple bank and other financial institution loans, mortgages, car loans, lines of credit, home equity loans and other transactions involving credit.
Sometimes you will see the bureau calls these accounts trade lines. No big deal because they are still your accounts.
These accounts usually start with when you opened the account then tell the type or kind of credit (installment, car loan, personal loan, etc.) and whether it is in your name or someone else is on the account with you. The total amount of the loan with your high credit limit or if it is a credit card, your highest balance follows. The next thing it shows is how much you still owe and if the payments are fixed or minimum monthly amounts. Your status, open/inactive/closed/paid, follow your payments then comes the item everybody wants to know, how well you've paid on the account.
This is where the bureaus list if you are late, and if late, how late and how often you've been late. If you are not late, it will show you pay on time.
Part three is called Public Inquiries or Public Records. This is where tax liens, judgments, foreclosures and bankruptcies are listed. You want this part to be blank and I do mean blank. If you see anything here, attempt to correct immediately if not sooner.
Part four is the Inquiries section. It is divided into two parts. Part one are the inquiries you initiate by filling out a credit application. This section is generally referred to as the hard inquiry section because you are the initiator of the inquiries.
The second part is called the soft inquiry section. What you'll find here are the names of companies who have sent you offers of credit or current creditors who are monitoring your account.
Sometimes there is a fifth section called Remarks. Read it because you never know who reported what about you.
Each credit report bureau places an explanation of terms usually on the backside of the report pages. In it, they explain what the numbers and letters you see next to your accounts mean. So, if you see something like I9, don't fret as it should be defined in the explanation of terms.
Of course, I9 could be negative, so you may have to fret. Either way, you are now almost totally armed to deal with that free credit report the law said the bureaus had to give you.
Good luck and may all your credit be A+.
Tom Koziol wrote "Credit Card Capers: Exposing All Their Dirty Tricks" as an expose on how the banks are robbing consumers via their credit cards. Get the dirty lowdown at http://www.creditcardcapers.com
MORE RESOURCES:
 CBS News | Tighter credit card limits add to woes MiamiHerald.com, FL - Now credit cards may become the next focus of the credit crisis. BY FRED TASKER Maria Osorio, 62, of Sunrise, never meant to run up her credit cards the way ... Banks must reveal full exposure to sub-prime Credit Crisis Collapse What Happens Next? Credit freeze sees small cracks |
 New York Times | Bush: US will work with partners on credit crisis The Associated Press - WASHINGTON (AP) — President Bush says world's wealthiest industrial countries will work together to attack the credit crisis spreading around the globe. ... Bush Vows to Resolve Crisis As financial crisis deepen, world leaders gather in Washington World finance chiefs grasp for solutions in firestorm |
 Boston Globe | Global leaders seek answer to credit crisis San Francisco Chronicle, USA - At the same time, loan markets everywhere remained broken, especially the critical wholesale credit markets, in which financial institutions lend each other ... Video: Bernanke: More Economic Pain Ahead TREASURIES-Surge in Europe as shares skid on credit woes Stocks down despite government moves to free up credit |
 The Associated Press | US will work with partners on credit crisis: Bush CBC.ca, Canada - It was the 21st time in 26 days that the president has spoken publicly about the credit crisis gripping financial markets and dragging down stock markets. ... Meeting G7, Bush Vows World Economic Fix |
 New York Times | Lehman Credit-Default Swap Payout Could Climb as High as $365 Billion Washington Post, United States - By Heather Landy NEW YORK, Oct. 10 -- In what may shape up to be the most expensive payout ever in the credit-default swap market, sellers of insurance ... STOP FINANCIAL WMD'S: Credit Default Swaps Insurance on Lehman Debt Is the Industry’s Next Test Lehman Credit-Swap Auction Sets Payout of 91.38 Cents (Update1) |
Is my credit union safe? Los Angeles Times, CA - By E. Scott Reckard, Los Angeles Times Staff Writer The government-run National Credit Union Share Insurance Fund insures most deposits at credit unions, ... Got Your Money in a Credit Union? You Too Are Safe In tumultuous financial times, credit unions might be an option to ... LETTER: Your money is safe with credit unions |
Fears Grow That Tight Credit Could Crush GM, Ford NPR - Standard & Poor's downgraded the credit of both companies and their financing arms this week. AFP/Getty Images Ford F-150 trucks sit at a dealership in ... Video: Money Minute: GM, GE, Oil GM, Ford too big to fail? CREDIT WATCH HITS GM, FORD |
Financial troubles spread to credit unions Los Angeles Times, CA - By E. Scott Reckard, Los Angeles Times Staff Writer It's not just giant banks on the brink these days: Losses are clobbering nonprofit credit unions that ... |
 New York Times | Credit cards, credit crunch: consumers feel pinch as issuers `go ... Newsday, NY - The credit crunch and weak economy also are taking a toll on credit cards. Perhaps you have noticed that you're receiving fewer offers for credit cards in ... Your Money One Thing You Can Control: Your Credit Score |
 Boston Globe | Transcript: President Bush's Radio Address FOXNews - The Fed has joined with central banks around the world to coordinate a cut in interest rates — a step that should help free up credit. ... Partial Tax Exemption Will Unleash the Free Market and Buoy Our ... Text of Bush's remarks Friday on the economy Comprehensive strategy to tame crisis: Bush |
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