Your credit report is one of the first places you need to go to check in on your financial health. Why? Not only is your credit report the place of record that outlines your entire credit history, but this report can provide you important information if something seems “off” on your credit score or if you’ve recently been denied credit.
Yet despite your credit report being so important, it’s a very difficult thing for the average person to read. Your credit report is multiple pages in length, there is a ton of information and numbers to sift through and it’s hard to know what to look for if you are looking for any sort of error or unknown account in your credit history.
Just what exactly is in your credit report and how do you read it? Here is a breakdown of some of the basic information found in your credit report and what each section means:
Report Number and Index: This section is all about navigating your credit report if you view it online or if you need to talk to someone about your report on the phone and you need your report/reference number.
Potentially Negative Items: Your credit report will show you if you have any potentially negative items. These include accounts that are unpaid or accounts that were paid past the due date. Negative items on your credit report may stay there for up to 7 years.
Status and Payment History: Your status and payment history shows if you have any on-time and late payment of your debts or credit items.
Accounts in Good Standing: Accounts that have a positive status and are considered in “good standing” are viewed by creditors as a good thing on your account.
Accounts Types: This tells you the type of loan and whether it is revolving (like a credit card) or an installment loan (like a car loan or student loan).
Soft and Hard Inquiries (Requests for your credit history): Your credit report will show how often someone has checked your credit history, also known as inquiries. A soft inquiry is when someone checks on your credit as a background check; this does not affect your credit score. A hard inquiry is when someone checks on your credit history because they are going to make a lending decision; this does affect your credit score. Hard inquiries can remain on your credit report for up to two years.
Personal Information: Your personal information is an obvious piece but a very important one. This includes things like your name, social security number, address and phone number. If it’s not accurate, your information (and therefore your credit history) could be mixed up with another person’s.
Personal Statement: Did you know that you can add a statement to your report? Sometimes you may want to add a personal statement if you have disputed an item on your credit report and it has not been resolved or to explain the situation behind an account in collections. You can do this by contacting the credit bureau.
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