Comprehending a Credit Report
Obtaining a credit report is an excellent way to begin taking control of your financial future. It's recommended that you review your credit report once a year, not only to be aware of your standing with creditors but to also keep abreast of errors and fraud. However, once your report arrives you may have trouble making sense of it. How are you to read and understand a credit report?
There are three major credit reporting agencies that issue credit bureau reports; Experian, TransUnion and Equifax. It is recommended that you obtain reports from all 3 credit report agencies as they most likely contain varying information since creditors subscribe to agencies on a purely voluntary basis. The credit reports provided by each of the different bureaus may present somewhat differently but generally speaking the information will be broken down in much the same way.
There are four main parts to the credit report: personal profile, credit history, public records and inquires. Check each section carefully for any errors. Note any errors you may discover on a separate piece of paper as you read over your report.
Personal Profile
At the top of the credit report you will find all your basic information such as your full name, current and previous addresses and employers, social security number, and date of birth. Your spouse's name may also appear if applicable. In addition, you may notice several variations of your name listed. This can occur when creditors record the information incorrectly. These discrepancies are usually left on your credit report. It is important however, to ensure that your address is correct. An incorrect address could alert you to a possible identity theft.
Credit History
The next section is your credit history. This provides you with an itemized list of your current active, past closed accounts and their balances or arrears. Listed first is the name of the creditor and your account number for each bill--sometimes the account numbers may appear partially obscured for security purposes. These debts could include real estate mortgages, credit cards, car loans, or medical bills.
There will be a column for identifying the nature of the account; Joint, Individual, Undesignated, Authorized User, Terminated, Maker, Co-signer or Shared. There will also be a notation of the date when the account was opened, number of months the account payment history has been reported and date of last activity. The report will show your high credit limit or the maximum you are allowed to borrow, if applicable. There is a column for Terms which indicates the number of instalments or monthly payments remaining on the account.
The next few columns will show the balance remaining on the account, any past due amounts and the status of the accounts. There are two types of accounts; instalment and revolving. An Instalment account means that there are fixed payments and a specific ending date, such as with a car loan. A revolving account is one with no fixed ending date as with credit card debts. Creditors like to see few revolving debts.
The credit report will indicate the different types of accounts and also may assign it a numerical ratings system. You may see such symbols as R1, R2, R3 or I1, I2, I3.The R or I indicates Revolving or Instalment and the numbers indicate the payment history of the account as follows;
- 0- account hasn't been used yet
- 1- paid as agreed
- 2- 30 plus days past due
- 3- 60 plus days past due
- 4- 90 plus days past due
- 5- 120 plus days past due
- 7- Collection account or bankruptcy
- 8- Repossession or foreclosure
- 9- Charged off or bad debt
The credit report will also show a record of any debts that have been turned over to a collection agency. It will show the date the collection was reported, the name of the company handling the collections and the company or lender that the loan was originally issued with and the balance remaining on the account.
Public Records
These are reports obtained from local, state and federal courts. They will indicate records of bankruptcies, tax liens and monetary judgments. Overdue child support records may also be shown. These public records will remain part of your credit history for seven to ten years and reflect negatively on your total credit score.
Inquiry Section
This section reveals any parties that have obtained a copy of your credit report over the last two years. There are generally two types of inquires, hard and soft. A hard inquiry is one initiated by you, whenever you apply for a loan or fill out a credit application. A soft inquiry comes in three forms; companies that wish to offer you promotional applications for credit, current creditors that are monitoring your account or credit bureau inquires requested by you, the consumer. These soft inquires do not show up on credit reports that businesses receive, only on copies provided to you. Although many lenders will view too many inquiries on your report as negative, it is important to note that two or more 'hard' inquires within a 14 day period count as just one inquiry.
Credit Score
The credit report can also reveal your credit score. A credit rating scores is a means of calculating an individual's credit risk to determine how likely they would be to make good on a loan. The score is a three digit number ranging between 300 and 850. The higher your score, the better it reflects on you as a borrower. A good credit rating score will enable you to negotiate for better interest rates.
Disputes
What if you should find an error on your credit report? Once you have discovered an error, contact the credit bureau that issued the credit report and state in writing what you found to be inaccurate. You will find the contact information listed at the top of your credit report.
The credit reporting companies must reinvestigate the claim within 30 days. They will then contact the party that submitted the item and attempt to resolve the dispute as quickly as possible. Remember, you have the right under the Fair Credit Reporting Act to dispute any inaccurate or fraudulent information that may appear on your credit report, and should do so in a timely fashion.
Once you learn to read and understand a credit report, you are moving towards a more secure financial future. Obtain your report today!
About The Author
Melanie Cossey is a successful home based freelance writer. Melanie writes many informative articles on the topic of credit, such as What is a FICO score and why is it important and Comprehending a Credit Report. To lean more about credit reports visit http://www.ultimate-credit-report.com for more on credit scores visit http://www.ultimate-credit-report.com/credit-score.html
MORE RESOURCES:
 Houston Business Journal | Corporate borrowers face hurdles amid credit fallout Bizjournals.com, NC - With credit markets seizing amid major bank failures and a free fall in investor confidence, experts say a prolonged credit crunch could place a serious ... New produce center deal nearly blown by AIG mess RiverBend takes a turn for expansion |
 NEWS.com.au | Credit still choked, Treasurys rally CNN - NEW YORK (CNNMoney.com) -- Credit markets were still choked Monday, as the financial crisis spread throughout Europe and stock markets around the world ... The Bailout, and a Keen Eye on Fixed Income Why This 'Credit Crisis' Hits Everyone Volatility the only short-term guarantee |
 Boston Globe | Carmakers in the credit coal mine CBC.ca, Canada - But Wall Street's high-profile collapse, and the related tightening of credit for all businesses, has made a difficult situation even worse — and stirred ... Credit Crunch Has Effect On Local Auto Sales Toyota Offers Surprising Car Deals Weak economy, tight credit squeeze LI auto dealers |
Tax Credit Extension Ensures Strong Future for Solar Industry MarketWatch - a leading provider of renewable energy solar solutions, commends Congress for resurrecting the tax credit package that will serve as the lifeblood for the ... Will Coal Be Cashing In On the New Tax Credit? Congress Extends Refined Coal Tax Credit US bailout bill heralds eight year tax credit extension for solar ... |
Credit crisis adds to pressures on auto dealers The Associated Press - For auto dealers already suffering under the worst US sales downturn in 15 years, the increasing cost of the credit they use to keep inventory in their ... How to buy a car - even now |
Credit Karma Launches New Credit Card Recommendation Service Based ... MarketWatch - The new service provides customized recommendations by credit score range using a computation of current credit card information and overall consumer card ... the fake identity racket |
 China Daily | Dow Plunges 700 Points Amid Global Sell-Off ABC News - Meanwhile, the credit markets remain stagnant, a sign that banks are too afraid to lend. The Federal Reserve is making more money available for borrowing, ... Video: Dow Closes Below 10,000, a Four-year Low The Wall Street bust Sector roundup: Auto suppliers, homebuilders |
 Boston Globe | Investors expect volatility as credit woes persist The Associated Press - Those steps are the latest sign that the troubles of US banks, which have all but paralyzed credit markets, are affecting the financial systems of other ... Markets Down Sharply The Fed’s Next Move: Interest Rate Cut Fed May See Lending to Companies, States as Next Crisis Fronts |
Fitch downgrades Ford credit rating another notch Forbes, NY - s credit rating deeper into junk status Monday as economic worries dragged down auto shares along with stock markets around the globe. ... Fitch Downgrades Ford & Ford Credit to 'CCC'; Outlook Negative Fitch cuts Ford, Ford Motor Credit, deeper into junk GM, Ford Tumble as Credit Crisis Unsettles Investors (Update1) |
Jobs lost, credit choked, contractors worried Bizjournals.com, NC - “The drop in construction employment accelerated in September and will get much worse unless credit markets reopen,” said Ken Simonson, chief economist for ... Job losses signal that US is in recession |
Credit and Banking Money Saving Services
The first rule when applying for banking and credit services is to always read the fine print and to understand all of it. Read up, take it home, and analyze it, ask the banking manager questions.
Different Ways to Borrow Money
There are many different ways to borrow money. Outlined below is a useful guide to some of most common ways of borrowing money.
Identity Theft - Additional Protection for Soldiers on Active Duty
Congress passed the Fair Credit Reporting Act several years ago in an attempt to smooth out some problems in the credit reporting industry. The best known provision of this Act is one that permits Americans to receive a free copy of their credit reports from each of the three main credit bureaus once per year.
My Credit Card Application Was Rejected! Now What?!?
No doubt, you've probably gotten literally hundreds of credit card applications in the mail and online, and each and every one of them has said that you've been "Pre-Approved".Of course it's natural that this would lead us to believe that the application process is simply a formality.
Credit Score - Reporting Your Financial Health
Credit score is one of the most basic, determining factor while loan borrowing. Credit score is the criterion for the creditor to ascertain whether to give you credit or not.
Dont Fall For A Scheme When Trying To Rebuild Your Credit History
For people with a spotty credit history or bad credit, getting approved for a standard credit card can be difficult, if not impossible.There are a number of credit card options that are aimed specifically at people who have bad credit and are trying to rebuild or repair it.
Minimize your Risk for Identity Theft
Identity theft is the fastest growing crime in America. According to the Federal Trade Commission, the number of identity theft incidents reached 9.
Common Credit Score Myths
A lot of credit score myths about fico score ratings get spread around and some of them are just outdated information. Sometimes even lenders can give you the wrong advice and it can get confusing.
Recognizing the Signs that You Might Need Credit Counseling
Most families in America today have a credit card; some have two or more. The type of credit card you own, gold, platinum, ext, is almost a status symbol in society.
Credit Cards Can Help You Get Out Of Debt
Your credit rating / credit score is based upon how you have dealt with credit previously. If you have always paid the full amount owing and never missed a payment then your credit score will be high.
Harassment of People in Debt by Creditors
HarassmentHarassment of people in debt by creditors or their agents is a criminal offence under the Administration of Justice Act 1970. It is often difficult to know what to do when you feel a creditor is not dealing with your account fairly.
Which Credit Bureau Should I Use To Check My Credit Report?
There are three main credit bureaus in the United States; Equifax, Experian and Trans Union. Each bureau collects your personal and financial information which is then sold to lenders such as banks, credit unions, credit card companies, mortgage and auto loan lenders.
How A Prepaid Debit Card Can Help You Rebuild Your Credit
Consumers today are up to their eyeballs in debt. And many people don't realize it until their good credit has been devastated.
Some Truth About Credit
Credit is currently and has been historically an integral component of our economy. Credit contribute a person's net worth, and financial power.
Can Credit Search Entries Affect Your Ability to get Approved for a New Loan in the UK?
About Search Entries:Every time a lender checks your credit history from your credit file (i.e.
Our World Of Credit Cards! Which One Is Right For You
There are not many of us who do not have a credit card these days. But, not all of us are as wise in the area of understanding how they work and how they make money.
Always Avoid Payment Holidays
Once you've been paying off a credit card for a while, you might be offered a 'payment holiday'. You'll get a letter, saying that since the company knows it's difficult for some families around Christmas (or whatever other excuse they think up), they're offering you a month off from paying, as a 'special present'.
3 Free Credit Reports For You
If you were to tell someone that they can have a certain item for free, more than likely their response would be, "what's the catch?" In the case of credit reports there is no catch, you can now get a free copy of this report through the three credit reporting agencies: Equifax, TransUnions, and Experian. Let's take a look at the law and how you can benefit from it.
Commercial Collections And Credit Granting
It is estimated that billions of dollars in delinquent commercial credit is currently being carried on the books of both American and international businesses. This figure changes as our economy grows or contracts.
Bank Robbery Growing In U.S.
Bank robbery has grown to become a huge problem in the United States but I am not talking about people robbing banks. I am talking about banks robbing people.