Anatomy Of A Credit Report

So, you've decided to get your free credit report. But now that you've received it, there are a lot of numbers, abbreviations and terms you've probably never seen before. How do you read it?

A credit report is basically divided into four sections:

1. Identifying Information. It's information to identify you. Make sure it's accurate. It's not unusual for there to be two or three spellings of your name or more than one Social Security number. This is usually because someone reported the information that way. Other information may include your current and previous addresses, your date of birth, telephone numbers, driver's license number, your employer and your spouse's name.
   
   
2. Credit History. Sometimes, the individual accounts are called trade lines. Each account will include the name of the creditor and the account number, which may be scrambled for security purposes. You may have more than one account from a creditor. Many creditors have more than one kind of account, or if you move, they transfer your account to a new location and assign a new number. The entry will also include:
   • When the account was opened
   • The type of credit account (installment, such as a mortgage or car loan, or revolving, such as a department store credit card)
   • Whether the account is in your name alone or with another person
   • Total amount of the loan, high credit limit or highest balance on the card
   • What is owed
   • Fixed monthly payments or minimum monthly amount
   • Status of the account (open, inactive, closed, paid, etc.)
   • The payment history of the account
   On Experian's report, your payment history is straightforward-"never pays late, typically pays 30 days late, etc."
   
   Other reports use payment codes ranging from 1 to 9; an R1 or I1 on a report is an indication of a good payment history on a revolving or installment account.
   
   
3. Public Records. You want this section to be blank. This section lists bankruptcies, judgments and tax liens.
   
   
4. Inquiries. This section lists everyone who asked to view your credit report. Inquiries are divided into two sections: "Hard" inquiries are ones you initiate by filling out a credit application or taking your child to the orthodontist. "Soft" inquiries are from companies that want to send out promotional information to a pre-qualified group or current creditors who are monitoring your account.
   
   

If you find a mistake on your credit report, you will need to complete a form that comes with the report, or follow the instructions on the explanatory sheet. The process takes time because the creditors have 30 days to respond. We advise you to check your report carefully as it's estimated that 80% of all credit reports have some kind of misinformation.