So, you’ve decided to pull your credit report. Few things in life are more stress-inducing than keeping an eye on your credit, and worse, knowing you need to fix something but don’t know what. Your credit report will spit out several pages of data, but it’s not always easy to decipher what the data means to you. But, it’s important to know what it means so that you never lose track of your credit. Simply knowing your credit situation is the first step to keeping a grip on it. And this starts with reading your credit report accurately.
What Are the Main Credit Bureaus?
There are three main credit reporting bureaus: Transunion, Experian, and Equifax. When applying for a mortgage, car loan, credit card, or attempting to borrow money for any reason, most of the time the lender will pull reports from all three bureaus. Unfortunately, not all lenders report to all three bureaus about your payments and activity after the money is loaned to you. So, when attempting to build your credit, check to see if your lender reports to all three bureaus.
All credit reports have pretty much the same information in them. There are five categories.
- Personal Information. This is basically just your name, DOB, address, employment, etc. You will want to inspect this section closely. With millions of people to report on, error is surprisingly common. If you have your father or aunt’s name, it happens even more frequently.
- Summary of Accounts. This is the really meaty part of your report. Your FICO score is derived mostly from this section. These are your current and past credit accounts and whether they were or are being paid as agreed. Look for signs of delinquencies and negative reporting. If you feel that any of these entries have been made in error, you can contest the report.
- Public Records. This is where any judgments or liens will be listed. Also, if you ever filed for bankruptcy, you will find that here.
- Inquiries. If you applied for a credit card last month, it may appear on your credit report as an inquiry. You may be surprised at the inquiries on your report. When you sign up for a cell phone plan, it’s likely that your credit is checked. Sometimes the credit check is a “soft” check, meaning it won’t show up as an inquiry, but sometimes it’s not. Too many inquiries can negatively affect your score for months. Avoid too many of these.
- Consumer Statements. You have the right to contest any item on your report. But, if you do this and the listing is verified, you may add a 100 word statement as an explanation.
How to Read a Credit Report for Equifax
Each reporting agency has nuances that will help you better understand the report as a whole. You may also notice that an account will show up on one report and not on another. Your FICO score can vary greatly, even 30-50 points, from one report to another.
Equifax has one major difference from the other agencies. Instead of listing your accounts strictly in alphabetical order, Equifax splits up the open and closed accounts. This makes it a lot easier to locate certain accounts.
For instance, if you had an auto loan five years ago and paid it satisfactorily, this will appear in your “close accounts” section. If you currently have a mortgage, this account will show up on your “open accounts” section.
How to Read a Transunion Credit Report
Transunion lists your accounts in alphabetical order, and the rest of the sections will looks pretty similar to the other bureaus. Transunion goes in depth on the employment history. You will see more complete information there, so check it to make sure it’s correct. While this information doesn’t affect your score, creditors will check this against your application, and inconsistencies could hurt your case.
Transunion also uses a pretty complicated coding system to reflect your payment history on your current and past accounts. Using colors and symbols, it visually demonstrates delinquencies and the extent of those delinquencies, if applicable.
How to Read a Credit Report from Experian
Experian has a great feature that clears up a major question many people have about their accounts. It’s called the “Status Details” feature. This means that you can see how much longer the account will appear on your report. Positive accounts will appear for ten years. Negative accounts, depending on the circumstances, appear for less time. But, seeing this date on your report can offer you a lot of peace of mind.
Knowing how to read your report can mean the difference between getting approved for that mortgage and not. Check your credit once a year, examine all the entries and make sure all the listings are yours, and if you see something that doesn’t belong to you, contest it with all the bureaus.