Want to improve your credit? A great place to start is by reviewing your credit report. Your credit report contains valuable information that lenders look at when assessing your creditworthiness. As a consumer, you want to check and see that all of your information is correct and know where you stand before applying for any new credit. In this post, we’ll go over where you can access this information and how to read your credit report.
Where can I get my credit report?
The good news is that you don’t need to spend any money to access your credit report. You can obtain your credit report for free from AnnualCreditReport.com once every year. However, it’s generally a good idea to monitor your credit on a monthly basis.
On the site, you can access your credit reports from each of the credit bureaus. The credit bureaus — Experian, TransUnion and Equifax — collect data on your credit history from lenders in order to create the credit report. Your credit reports contain a lot of the same information but may not be identical as some lenders don’t report to all three credit bureaus.
You’ll want to review all three to make sure there are not any errors. If there are, it could be a costly mistake and result in higher interest rates on any loans. If you do find errors on your credit report, you can take these steps to dispute the errors. But first, let’s learn how to read your credit report*.
How to read your credit report
Your credit report is comprehensive and contains a ton of information that lenders use to evaluate risk.
The first part of your credit report contains your personal information. This contains:
- Your full legal name
- Current and previous addresses
- Year of birth
- Telephone number
On my Experian credit report, it has all names associated with my credit. So it has my full name, full name with middle initial and full name and middle name. On top of that, it has all of my previous addresses, year of birth as well as former home phone number and current cell phone number. If you ever need to provide your address history on a job application, your credit report is a good place to look!
Your credit report also includes any personal statements and any potentially negative items. Under the Fair Credit Reporting Act, you can add a short personal statement to explain any of the negative items on your report.
Under the potentially negative items, there may be a list of any accounts that are delinquent or late. After that it will show your accounts in good standing.
Then your report will go through all of your accounts, whether they are open or closed. For example, my student loans that are paid off are included on the report. The list of your accounts contain many details including:
- Account name (typically the lender’s name)
- Account number
- Type (for example, Education)
- Terms (for example, the repayment period)
- Recent balance
- Credit limit or original amount
- High balance (the highest balance you’ve had with this particular account)
- Monthly payment
- Recent payment amount
- Date opened (when the loan was created)
- First reported (when it appeared on your credit report)
- Responsibility (such as individual, authorized user, etc.)
- Status (such as Open, Closed, Paid, etc.)
- Comments (one of my credit cards says “account closed at consumer’s request”)
- Account history
- Balance history (including account balance / date payment received / scheduled payment amount / actual amount paid)
You will want to pay special attention to the accounts listed and make sure they are accurate. If your current balance is different than what it is now, it’s important to note that lenders may report to the credit bureaus on or close to the statement date so there may be a discrepancy. If there’s a huge difference, you will want to review in case of identity theft or fraud.
Pay special attention to the accounts to make sure they are completely accurate.
Any past due accounts, collections, or remarks may be in this section as well. If you have loans that are not in good standing, you can review these areas of interest.
Additionally, you may see public records such as any tax liens, bankruptcies, judgements, etc. on your credit report as well.
After your accounts listed, you will see credit inquiries. Credit inquiries refers to the instances where you applied for new credit. This section contains:
- Account name (the lender, such as Chase)
- Date of request (when you applied for the loan/credit)
- Lender’s address
- Comments (may include how long inquiry will be on record or state that it is on behalf of an employer, such as a credit check)
At the very end of the credit report, you may see disclosures about knowing your rights and what you are entitled to under the Fair Credit Reporting Act. For example, you have the right to know what is in your file, you can dispute any errors and you must give consent to employers or anyone else to do a credit check.
What to look out for on your credit report
Looking at your credit report can be a blast from the past. It shows so much information it can be dizzying trying to figure out what’s worth looking out for and what’s not. So here are some questions to help guide you:
- Is your name spelled correctly?
- Do you recognize all of the credit inquiries? (if not, it could be a sign of fraud or identity theft)
- Are there any past due accounts or late payments listed when you know you’ve made payments on time?
- Do your account balances look accurate? (they may differ as your balance gets reported at different times, but if it’s wildly different than any balance you’ve had, you’ll want to see what’s going on)
- Are there any accounts that you have not opened yourself? (this may be a sign of fraud)
These are the key things to look out for. While you can get your free credit reports from AnnualCreditReport.com you may also get free credit monitoring from Credit Karma. Earlier this year, Credit Karma informed me that an account was opened in my name for an Old Navy credit card. This was something I did not open and because of the notification, I was able to resolve this case of identity theft and close the card immediately before any purchases were made.
Staying on top of your credit report will help you know where you stand and correct any mistakes that you see. This will have a direct result on your credit score, so when you apply for any new loans or credit you’ll have the best shot of getting approved.