Understanding Your Credit Report
Posted on January 9, 2006
Credit is very important to your future and directly correlates to the interest rates you will get have when financing anything. Your credit report is available on the internet through various websites. The first step to understanding your credit report is to get a copy of it, so search for free credit reports and print it out for your own reference, most reports will contain the same information. It is recommended to obtain a copy every 12 months to check for errors and possible fraud.
Your credit report is divided into four parts. The first being your identifying information which should confirm your driver's license number, last known address, and phone number. The second part is your credit history; each account will have the name of the creditor and the account number. You'll want to make sure these are valid accounts that you have or previously had. If they're wrong, you'll be shown a way to dispute them. Each credit company puts your payment history, including all late payments and your balance. The third part is public records; it's a report of past criminal record. This will contain any arrests or bad judgments made against you. The last part is inquiries, and is basically any company who's seen your credit report. Anytime you apply for a loan, credit card, credit line, someone can see your report and pull an inquiry report. It's not recommended to show excessive inquiries.
The three major credit reporting companies are Experian, TransUnion, and Equifax and each will have separate information in them. This is because each company has different credit companies that subscribe to them, and that's how they get their information. The credit card companies, mortgage companies, and banks all send information on each creditor monthly. They then combine all the credit information they receive about you, and come up with your credit score.
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