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A Beginner's Guide to Reading Your Credit Report


Understanding Your Credit Report


Your credit report is a detailed record of your credit history provided by credit reporting agencies. It includes personal information, credit accounts, credit inquiries, and public records. Here’s how to navigate each section:


Personal Information

  • What’s Included: Your name, address, Social Security number, and possibly employment information.

  • Common Errors: Misspellings, incorrect addresses, outdated information, or variations of your name that you don’t use. These mistakes can be harmless but might also indicate a mix-up with someone else’s credit information or identity theft.

Credit Accounts

  • What’s Included: Current and closed accounts, such as credit cards, mortgages, and loans, with details on the account type, the date opened, the credit limit or loan amount, account balance, and payment history.

  • Common Errors: Accounts that you don’t recognize, incorrect reporting of account status (e.g., closed accounts reported as open), and inaccurate credit limits or balances.

Credit Inquiries

  • What’s Included: A list of entities that have requested your credit report. Inquiries can be “hard,” usually from applications for new credit, or “soft,” which do not affect your credit score.

  • Common Errors: Unfamiliar inquiries can be a sign of identity theft. Also, hard inquiries that you did not authorize should be disputed.

Public Records

  • What’s Included: Bankruptcies, foreclosures, suits, wage attachments, liens, and judgments.

  • Common Errors: Public records that do not belong to you or paid judgments that are still listed as unpaid.


How to Read Each Section


Review Personal Information:

  • Ensure all personal information is accurate and up to date.

Examine Credit Accounts:

  • For each account, confirm that the account numbers, credit limits, balances, and payment histories are correct.

  • Verify that the status of each account (open, closed, paid, etc.) is reported accurately.

Inspect Credit Inquiries:

  • Identify each inquiry to ensure you authorized it.

  • Remember, too many hard inquiries can negatively impact your credit score.

Scrutinize Public Records:

  • Confirm that any listed public records actually belong to you and reflect the current status. For example, a bankruptcy should drop off your report after 7-10 years, depending on the type.


 

Examples of Common Errors and How to Address Them


  • Mistake: An account listed on your report that doesn’t belong to you.

  • Action: This could be a clerical error or identity theft. Dispute the error with the credit bureau and inform the creditor of the mistake.

  • Mistake: A payment marked as late that was paid on time.

  • Action: Gather payment confirmation or bank statements as evidence and dispute the error with the credit bureau.

  • Mistake: A hard inquiry that you didn’t authorize.

  • Action: Contact the creditor to inquire about the inquiry. If it was made in error or without your authorization, request that the creditor retract the inquiry from the credit bureau.

  • Mistake: A discharged bankruptcy still listed as active.

  • Action: Disputes of this nature require providing the credit bureau with a copy of the discharge notice and a letter asking for the correction.


 

Final Steps


After identifying any errors, take action by filing disputes with the credit reporting agencies. You can do this online, by phone, or via mail. It’s also a good idea to contact the creditor directly to correct any inaccuracies. Keep copies of all communications and documentation related to disputes for your records.


By regularly reviewing your credit report and addressing errors promptly, you can help ensure that your credit score accurately reflects your credit history and behavior.

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