How To Read Your Credit Report

Find Mistakes and Prevent Identity Theft

How To Read Your Credit Report
July 25, 2017

Have you read anything lately that was so important that it changed your life? If not, we would like to suggest something to read — your credit report. Granted, simply reading your credit report may not have any effect on your life, but failure to do so can harm your life if identity thieves are opening accounts in your name and racking up bills without your knowledge.

A review of your credit reports can reveal several issues to correct, including false accounts and errors in reporting your bill payments. Erroneous data can cost you money by lowering your credit score and also potentially cause you to be denied credit cards, mortgage loans or other forms of credit.

Your credit report represents a relatively comprehensive record of all of your credit activity. It contains information from any creditor that reports activity to the three major credit bureaus (Experian, Equifax, and TransUnion). Information is not automatically reported to all three agencies, so it is best to check all three reports to get the full picture. Each agency's credit report differs slightly in format, but they will all contain the same basic types of information.

  • Personal Information – Your name, addresses associated with any of your accounts, birthdate, and any other personal information such as telephone numbers or employment information. There may be multiple names including misspellings, nicknames, and maiden names. Check for any names that may be signs of errors or fraud.

    Any fraud alerts or personal statements that you have included should show up in this area of the report.

  • Public Records – This section contains financial account information from legal actions that are public record. Civil judgments against you, tax liens, and bankruptcies are the types of information recorded here.

  • Account information – This is typically split into two main categories: Accounts in Good Standing and Adverse Accounts. Up to two years of your credit activity may be available for each account. Both installment accounts (such as auto and student loans) and revolving credit accounts (such as credit cards) will be included and may have their own subheadings. Mortgage accounts may be listed separately.

    Each account listing contains items such as creditor information, account numbers, loan status, date opened, current balances, high balances, credit limits, estimated date of removal for installment accounts, monthly payments, and the date of last activity. Payment histories are often shown with color-coding as green for paid and yellow/red for missed or delinquent payments.

  • Credit Inquiries – These are requests to view your credit report, including your own requests as well as those from potential creditors. One section covers soft inquiries such as your own requests or promotional inquiries that can only be seen by you; the other section covers hard inquiries based on credit applications that can be seen by both you and the requesting lender.

    The date of the request is noted, along with information on the requestor such as business type and date of removal (requests may remain on the report for up to 2 years).

    Not every creditor reports to the credit bureaus; do not be worried if you do not see all of your accounts. Focus on any information that is erroneously reported, accounts that you did not open, or unsolicited hard pulls on your credit.

Errors in your personal information could be inadvertent, or a sign of someone attempting to open a false account. In either case, it's important to contact the credit bureau to get the discrepancy resolved. Similarly, review your account history for any incorrectly reported payments and anything in the adverse account section that gives an inaccurate reflection of your account.

Follow up with creditors on any unsolicited hard pull that you do not recognize. You may be able to stop a fraudulent account before it can be activated. In the case of accounts that have already been opened, you must take immediate action with the creditors to close these accounts and limit the damage.

If you find evidence of identity theft, apply a credit freeze on your account to prevent any more fraudulent accounts to be opened without your consent. You will need to lift the freeze temporarily to open any legitimate new accounts. As of September 21, 2018, federal law allows you to apply and lift credit freezes free of charge. Let MoneyTips protect your credit and your identity with a free trial.

By keeping up with your credit reports, you can have the peace of mind that comes with secure credit accounts — or the peace of mind that comes with stopping a thief from stealing your identity and draining your accounts. Either way, peace is yours.

You can check your credit score and read your credit report for free within minutes using Credit Manager by MoneyTips.

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