Learning how to read your credit report correctly is just as important as getting a copy of your credit report. In this article, we will discuss the basics on how to read your credit report and how you can take the right action based on the information it gives you.

Free Credit Report for All

Everyone is entitled for a free copy of the credit report from the three major credit bureaus. This right is stated in the Fair Credit Reporting Act to protect consumers from erroneous or irresponsible reporting. This also gives everyone the right to dispute charges in their report that they think are incorrect or false. If you have a plan to apply for a loan or a credit card, the first step you should do is to obtain a copy of your credit report.

Information in Your Credit Report

What exactly can you read in your report? Look at your credit report and you will see that it is divided into four categories. The first one is your Personal Identity section where all your personal details are listed such as your name, address, Social Security Number, phone numbers, Driver’s License number, etc. Check if there are misspellings and missing letters or digits in each of these data to make sure that your credit report is accurate.

Next would be your credit history and this is where all your credit information is listed. All your credit cards, savings or checking accounts, mortgage loans, car loans, insurances, etc. are reflected in this section. This is where you’ll see records of your debts and payments as well as the dates they were incurred or paid. Your credit limit, past due charges or closed accounts will also be included in this section.

Be diligent in checking the accuracy of your credit history and watch out for any unauthorized charges that may have been billed in your account. In case there are charges that you did not make, do not hesitate to notify your creditor and the credit bureau who issued your report. You can do this by sending a letter of dispute and explain why you think there has been a mistake with these charges.

The third section in your credit report is the Public Records section. This part of your report will only contain information if you have existing tax liens, judgments, foreclosures, or if you’ve filed for bankruptcy in the last seven years. However, if it has been past seven years, you should request that this information be removed from your credit report as this can be damaging to your credit.

Finally, the Inquiries section contains details from lenders who have requested for your credit report. This is where you can check the names of the companies that you have send applications to. Take note that if you see an unfamiliar lender inquiring about your report that you never send an application to, notify this lender right away to clear the issue. Someone may be trying to open an account using your name and have sent an application to this lender.

Remember, look for any signs of errors, unfamiliar charges, or changes in your personal details and make sure that you inform the credit bureau about it. Always send your dispute letter via registered post mail and keep all correspondence between you and the bureau for reference.