How To Read A Credit Report

A Few Tips Related to Understanding How to Read a Credit Report

When it comes to learning how to read a credit report, one can very often easily become confused. However, there is no need for it, since you only need to understand the implications of what all of the information contained in your credit reports really mean.

The reports can also easily be divided into any of four different sections that can be studied individually for greater clarity. The first category is, of course the section which contains information that identifies you and includes your address, name as well as social security number and even driving license number and name of spouse, your date of birth and telephone number.

Credit History

The second section is the one that contains your credit history and includes your credit accounts. It contains information such as the duration for which you have held the account, the kind of account it is, and whether it is jointly held or not, and also the loan amount taken and credit limits.

If anyone wishes to learn how to read a credit report, this section must be read over carefully in order to find out whether an individual has been making timely payments or not. It is also to determine whether that individual has ever owed money that was not repaid.

Another important aspect in learning how to read a credit report concerns the third section. In this section, the credit report contains information about your public records including any bankruptcies, judgments that have been made that were not in your favor and also any tax liens.

Yet another important aspect to learning how to read a credit report deals with the fourth section in which is contained information regarding enquiries that have been made about you. Thus, whenever an enquiry is made regarding your credit standing, such information is included in this section of your credit report though to be sure, soft enquiries are not included.

According to the Fair and Accurate Transactions Law that came into force in early December of the year 2003, each and every American citizen has the right to obtain a copy of his or her credit report. They can obtain it once a year, and without cost, from the three major credit report bureaus , which are Trans Union, Experian and Equifax.

The bottom line is that it is really not at all hard to learn how to read a credit report because the reports are most often made in this basic format. It is also standard practice for credit bureaus to give explanations of terms used (usually at the back of the report) and these explanations help let you know what various letters and numbers against your account really mean.