How To Read A Credit Report

Fixing Your Credit Requires Being Able To
Understand Your Credit Report. Don't Worry...
Fix Your Credit EZ Can Help You With That.

Intro

If you're like most people, then a credit report is not something that you look at all that often, if ever.

It's not surprising then that you might not know exactly what you're looking at or what it actually means.

Fortunately, reading a credit report isn't rocket science. And the credit bureaus have helped by making changes to theirs reports in recent years to make them much easier to read.

The following information then will tell you the main sections of the credit report, the primary information within each section, and few helpful credit repair tips.

Section 1--Personal Information

This section contains your:

• name,
• address,
• employer,
• date of birth,
• Social Security number,
• spouse's name.

Several variations of each may be listed, such as former addresses and employers. This information is supplied by you or a creditor when you fill out a credit application.

Fix Your Credit EZ Tip:

If there are name variations, old addresses, previous employers, and even previous spouse's names listed in this section, either call or write the credit bureau to have the information removed. Some of your negative accounts may have this outdated information attached to it instead of your current and accurate details. When you challenge these negative accounts it becomes harder for the creditor to validate or verify the account if you've already removed these items from the report.

Section 2--Public Records

• Bankruptcies,
• liens,
• judgements,
• garnishments,
• felony convictions, etc.

Anything that is a public court record may be reported in this section. Look closely at the information. The paperwork for public records will usually go through many hands, such as the courthouse and the credit bureaus, before appearing on your credit report. This increases the chances for errors. Just like anything else on your report, the information here can be disputed.

Fix Your Credit EZ Tip:

If you do see an error or three on any of your public records, be very careful about sending in documentation in an effort to "correct" your report. If you're not careful, you may find that you have actually verified the information with the documentation you've submitted, making the public record nearly impossible to dispute later.

Section 3--Credit History

Loans, leases, mortgages, credit cards, collection accounts will be listed here. Each account will have details relevant to that account, as well as your payment history.

The important details here are...

Date of Last Activity

This is the date that is used to start the 7-year reporting clock.

Date Last Reported

This is the last date that the creditor supplied an update to the credit bureau.
This date has no bearing on the reporting period or Statute Of Limitations computation.

Account Type

The first part actually indicates the type of account and the second part summarizes the payment history.

R= "revolving" or I="installment" or J="Joint"

0 Too new to rate
1 Pays account as agreed
2 Not more than two payments past due
3 Not more than three payments past due
4 Not more than four payments past due
5 At least 120 days or more than for payments past due
7 Making regular payments under W.E.P (wage earner plan)
8 Repossession
9 Bad Debt; placed for collection; skip

As examples, you might see R1 or I9 or J8. If you see an account type that has anything other than a 0 or a 1 in it, then it's a negative account.

Limit/Original Amount

For installment loans this is the amount of the loan when you first got it.
For revolving accounts, it will be your credit limit.

This value is part of the calculation to determine your credit utilization %.

Fix Your Credit EZ Tip:

If the amount showing in the Limit/Original Amount field is lower than your actual credit limit or original amount, then it may be lowering your credit score. Even if the account is not actually negative. As a result, you will still want to challenge this account and get the value of this field back to being as high as possible.

Balance

The amount owed as of the date reported.

Open/Closed

Whether an account is open, active, and availaible for your use, or closed and no longer usable.
"Closed by Consumer" indicates that the account was closed at your request. This is neither positive or negative.
"Closed By Credit Grantor" indicates that the acount was closed by the creditor, often involuntarily. This is nearly always seen as a negative.

Section 4--Inquiries

This is a listing of everyone who has "pulled" a copy of your report.

Usually the credit bureau will divide the inquiries into two sections on your report--"hard" inquiries and "soft" inquiries. Within these two sections, the inquiries show on your report for up to two years and will be organized by their date.

"Hard" Inquiries

These are a result of you applying for some type of credit, or a current creditor looking at your report. A hard inquiry is one that can damage your score for up to a year, but then is supposed to simply be visable on your report for another year after that. These are the inquiries that lenders can see.

"Soft" Inquiries

These are commonly the result of you checking your own report, or by what are considered "non-creditor entities" such as employers, landlords, credit bureaus, credit monitoring services, etc. A soft inquiry is one that does not affect your score and is only visible by you.

There are specific reasons which must be met before anyone can pull your report. A "Permissable Purpose" refers to the legal requirements for anyone pulling your report, creditor or otherwise. In general, you must have:

• Applied for something, such as credit or insurance.
• A current, open account with the creditor.
• Otherwise given your permission for the report to be pulled.

Companies or individuals pulling your report without "Permissable Purpose" are violating Federal Law, and subject to fines of $1,000. The fines are even greater in certain states.