A Beginner’s Guide to Reading Your Own Credit Report

It is important that you know how to read your own credit report. This is something you should do at least once each year to look for errors. The credit bureaus make mistakes sometimes, and it is up to you to catch them. These errors are fairly rare, but it is a good idea to do this nonetheless. You might have to pay for some copies of your report, but it is definitely worth it.

What Does Your Credit Report Consist of?

Your credit report is an official record of all your credit activity. It lists things like bankruptcies, late payments, defaulted loans, and liens. You technically have three separate credit reports from the four main consumer credit reference agencies—Experian, Equifax, Callcredit, and Crediva. Some creditors will report missed or non-payments to one of these agencies, while others will report them to all four.

Your Personal Details

Part of your credit report is personal details, such as your name, address, phone number, and date of birth. When you go to check your credit report, it is important to make sure that it is all correct. If there is anything that is out of date, you should make the credit bureau aware right away.

History of Employers

Your credit report will also list the various employers that you have had over the years. Sometimes this list needs to be updated, and you will have to inform the credit agencies if an update is necessary. This is important information for lenders to use when deciding if someone is going to get approved for a loan. They need to know that the person they are giving the loan to is reliable.

Account Details

There will also be details for your various credit accounts that you have had. This includes any open accounts, closed accounts, your full payment history, and the payment status of any active loans. This section plays a fairly large role in determining what your overall credit score is going to be. A single late payment can have a surprisingly negative impact on your credit score. This is why you need to keep track of all the bills you have to pay.

Public Records

The standard credit report also consists of any items that are a matter of public record, including bankruptcies and judgments against you in civil court. These kinds of things that do a lot of damage to your credit. After a while they will eventually fall off your credit report, and this change will be reflected in your overall score.

Inquiries

Whenever you submit an application for a loan or credit card, it counts as a hard inquiry, which has a small but negative impact on your score. This is precisely why you should avoid filling out a lot of credit applications within a very short period of time. This can really count against your credit in a big way.

Removing Errors from Your Credit Report

If you ever find that there is a mistake on your credit report that needs to be corrected, it is important that you get it taken care of. You should report any inaccurate information to the appropriate credit reporting agency. It can take a while to get these items removed from a credit report, which is why some people hire a third party company. There are certain businesses you can hire to get the job done faster than you could by yourself. The sooner these items get taken off your credit report, the sooner your score will go up.

How to Check Your Credit Report

Checking each of your three credit reports really isn’t that difficult. Each credit reference agency has a different process for doing this. Both Experian and Equifax offer free 30-day trials that you can take advantage of for checking your credit. You can get a free copy of your credit report from each agency, but only once a year.

If you want to get it more often, you can pay for a service. A full credit reporting service can be useful if you frequently need to check your credit for whatever reason. Each of the credit reference agencies offer this service.

Make sure that you get a copy of your credit report from each of the main CRAs. By doing this you will be able to see if there are any mistakes on any of your reports. Since each report will likely be at least a bit different, it is crucial that you do this.

Final Thoughts

Your credit reports are very important for a number of reasons, so you should make a point of looking at them on a semi-regular basis. Those who do this will be able to spot mistakes on their credit report. If you there is some kind of error on your report, you can get it removed to increase your score.

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