How to Read a Credit Report

Your credit report is an important document that can significantly affect your purchasing power in today’s marketplace. Getting a copy of your credit report to ensure it’s accurate is crucial, but these documents can be somewhat confusing. Here are the major sections included on a credit report and what to look for:

Personal Information – This is the information that is used to identify you:

• your name

• your address (and previous addresses)

• your social security number

• your driver’s license number

• your employer

• other personal information

If a creditor misspelled your name when they submitted information, it will show up on your report. This type of error is not a major cause for concern. However, if your social security number or other important information is wrong, you should have this corrected right away.

Credit History – Here is where you will find information about your creditors and your debts. In addition to making sure all the debts listed here are yours, you’ll also need to pay close attention to information about your payment history. Ideally, your report should show that you always pay on time. Consistent late payments or loans that have been charged off or defaulted on are all blemishes on your report, and can lower your credit score. If any late payments or account numbers are incorrect, make sure they get corrected.

Public Records Section – This is where any serious financial problems you’ve had in the past will show up. Information about bankruptcies, judgments, and liens will be included here, and having anything at all in this section will make obtaining credit difficult. If there is information in this section that is inaccurate, it’s imperative that you dispute it.

Inquiries – Any time you or someone else asks to see your credit report, it is considered an inquiry. There are hard and soft inquiries. If you see a ton of hard inquiries on your report, it may be dragging down your score. Hard inquiries are typically made when you fill out applications for credit, which is why it’s important to avoid applying for numerous credit cards and loans, especially right before you will be looking to obtain a loan for a large purchase. Soft inquiries are less important, as those are usually made by lenders who send you offers in the mail.

How Do You Get Incorreect Items Removed
Or Changed On Your Credit Report?

When you receive a copy of your credit report, there is usually a form you can use to dispute incorrect items (both on paper and online). You can also write a letter, which includes your personal information along with your request to remove or change the errors.

If you've had numerous problems, you can request written verification - and if the credit bureaus cannot very the item as correct (which they often cannot) then they must remove it. This is the most effective way to repair your credit.

Finally, if you have had credit problems, don't despair!

Make an effort to get verification for as many problems as possible, focus on paying on time and paying down your debt, and do your best not let money problems get out of the control in the future!

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