How to Read Your Credit Report

It's a wise decision to get a copy of your credit report, but it is just as important that you know how to read it and understand what it means.

Three major credit-reporting agencies

There are three major credit-reporting agencies that will play a big part in your credit. These three are Experian, TransUnion, and Equifax. You should print a copy of your credit report from these three companies at least every 12 months. You can find out more about these bureaus in our article, Free and Instant Credit Reports.  Each bureau's web site should show you how to obtain a free report.

Why are the three major credit bureaus' reports different?

The three major credit reports will report different information. This is because different creditors subscribe to different bureaus.  The credit bureaus obtain their information from their creditor subscribers.

The main components of a credit report and what they mean

A credit report is divided into four sections:

• identifying information
• credit history
• public records
• inquiries.

Identifying Information.  Your identifying information is the part that identifies who you are. There may be hundreds of people with the same name (such as John Smith, for example), but each "John Smith" or other person who shares the same name will have a different social security number. The "identifying information" section will also confirm your driver's license number, address, and phone number.

Credit History.  The second part of your credit report contains your credit history. Each listing will have the name of the creditor and the corresponding account number. You to make sure that these are valid accounts that you currently have or had at one time. If they are wrong, you will be given a chance to dispute them.

Public Records.  This section will contain information about your criminal record, if you have a criminal record.  It will also include bad judgments against you, tax liens, or other data that is amatter of public record through the courts or recorders' offices. 

Inquiries.  The last part of the credit report lists inquiries.  In this section, anyone who has requested a copy of your credit report is listed. For example, if you apply for a loan or line of credit, your potential lender will post an inquiry. It is not a good thing to have a lot of inquiries on your report.

Disputing Your Credit Report

If there is any information in your credit report that is questionable or incorrect, you will have a chance to dispute it. Your dispute will be reviewed and it may be taken off your report.