STAX
05-02-2008, 09:56 AM
How to Review Your Credit Report
Review your credit report carefully when you receive it. This will help you to:
* Discover and correct errors: Credit report errors can cause your applications for credit, employment, or housing to be denied unexpectedly and unfairly. To prevent this, order and review your credit reports at least six months in advance of applying for a major loan. This will allow you enough time to dispute any errors that you might find. It will also give you time to prepare an explanation for any remaining inaccuracies to a potential creditor.
* Get a snapshot of how creditors see you: Your credit report can help you anticipate how creditors will view you as a potential borrower. Once you’ve identified the weaknesses in your credit report, you can work to resolve them and improve your appeal as a borrower in the eyes of creditors.
* Become aware of identity theft in its early stages: Most people don’t know they’ve been a victim of identity theft for months or even years after their identity is initially stolen. The sooner you recognize and address identity theft, the less damage will be done to your credit and your finances.
Credit Report Contents
Although each of the three credit reporting agencies uses a slightly different format, all credit reports contain the same four main types of information:
* Identifying data
* Credit history
* Credit inquiries
* Public information
Identifying Data
The identifying information in your credit report comes primarily from your past credit and loan applications. This section will generally include the following data:
* Your full name, including any nicknames and suffixes (e.g., Jr., Sr., III) used to apply for credit
* Your spouse’s name, if you’re married
* Your Social Security number
* Your birth date
* Your current and previous addresses
* Your current and previous employers
Credit History
The credit history is the most important section of your credit report. It lists every credit account opened in your name. Each listing contains the following information:
* Name of creditor and account number
* Type of account (revolving, installment, etc.)
* Date account was opened
* Payment history, including late or missed payments and collection referrals
* Credit limit or original loan amount
* Current balance due
* Date of last payment
* Date information was last reported
* Number of months information has been reported
* Authorized users, if any
Note that not all creditors report to all credit bureaus, so it’s possible that some of your accounts will appear on one credit bureau’s report but not on another’s.
Credit Inquiries
The credit inquiries section lists the names of creditors and others who have reviewed your credit report during the last two years. Only credit inquiries made by prospective creditors or employers, called hard inquiries, are reported to businesses that review your credit report.
Some inquiries that are not reported to businesses will nonetheless appear when you request your own credit report. These include:
* Inquiries made by you
* Inquiries made by creditors for promotional purposes
* Inquiries made by creditors for account monitoring purposes
Public Information
The public information section includes matters of public record, such as:
* Bankruptcy filings
* Foreclosures
* Lawsuits
* Court judgments
* Tax liens
What to Look For in Your Credit Reports
The credit reporting industry collects billions of pieces of credit history information every month, so errors and outdated information do occasionally pop up. Be sure to look over every part of your credit report carefully and mark down any errors you find. If you find an error in a report from one credit bureau, make sure to check the others for the same error, since you’ll have to correct each error in each report (see How to Fix Credit-Report Errors). In particular, look for the following:
In the Identifying Data:
* Incorrect or misspelled name
* Other inaccurate identifying information, such as a wrong Social Security number, marital status, birth date, or address
* Outdated or incorrect employment information
In the Credit History:
* Accounts that are not yours
* Accounts that are reported more than once
* Incorrect account histories, such as late or missed payments that you paid on time
* Late payments that are more than seven years old (after seven years they should disappear automatically from your credit report)
In the Credit Inquiries:
* Credit inquiries that you didn’t initiate
* Credit inquiries that are more than two years old
In the Public Information:
* Paid liens or court judgments that are listed as unpaid
* Accounts that were charged off through bankruptcy but are still shown as past due
* Paid liens or court judgments that are more than seven years old
* A bankruptcy that’s more than 10 years old or isn’t listed by its specific chapter
* Collection accounts or charge offs (other than a bankruptcy) that are more than seven years old
Evidence of Identity Theft
In some cases, a mistake on your credit reports may not be the result of simple human error but is actually a red flag for identity theft. The most common credit report errors stemming from identity theft are:
* Accounts you didn’t open
* Unauthorized changes to familiar accounts
* Authorized account users you didn’t authorize
* Credit inquiries you didn’t initiate
* Addresses where you haven’t lived
Review your credit report carefully when you receive it. This will help you to:
* Discover and correct errors: Credit report errors can cause your applications for credit, employment, or housing to be denied unexpectedly and unfairly. To prevent this, order and review your credit reports at least six months in advance of applying for a major loan. This will allow you enough time to dispute any errors that you might find. It will also give you time to prepare an explanation for any remaining inaccuracies to a potential creditor.
* Get a snapshot of how creditors see you: Your credit report can help you anticipate how creditors will view you as a potential borrower. Once you’ve identified the weaknesses in your credit report, you can work to resolve them and improve your appeal as a borrower in the eyes of creditors.
* Become aware of identity theft in its early stages: Most people don’t know they’ve been a victim of identity theft for months or even years after their identity is initially stolen. The sooner you recognize and address identity theft, the less damage will be done to your credit and your finances.
Credit Report Contents
Although each of the three credit reporting agencies uses a slightly different format, all credit reports contain the same four main types of information:
* Identifying data
* Credit history
* Credit inquiries
* Public information
Identifying Data
The identifying information in your credit report comes primarily from your past credit and loan applications. This section will generally include the following data:
* Your full name, including any nicknames and suffixes (e.g., Jr., Sr., III) used to apply for credit
* Your spouse’s name, if you’re married
* Your Social Security number
* Your birth date
* Your current and previous addresses
* Your current and previous employers
Credit History
The credit history is the most important section of your credit report. It lists every credit account opened in your name. Each listing contains the following information:
* Name of creditor and account number
* Type of account (revolving, installment, etc.)
* Date account was opened
* Payment history, including late or missed payments and collection referrals
* Credit limit or original loan amount
* Current balance due
* Date of last payment
* Date information was last reported
* Number of months information has been reported
* Authorized users, if any
Note that not all creditors report to all credit bureaus, so it’s possible that some of your accounts will appear on one credit bureau’s report but not on another’s.
Credit Inquiries
The credit inquiries section lists the names of creditors and others who have reviewed your credit report during the last two years. Only credit inquiries made by prospective creditors or employers, called hard inquiries, are reported to businesses that review your credit report.
Some inquiries that are not reported to businesses will nonetheless appear when you request your own credit report. These include:
* Inquiries made by you
* Inquiries made by creditors for promotional purposes
* Inquiries made by creditors for account monitoring purposes
Public Information
The public information section includes matters of public record, such as:
* Bankruptcy filings
* Foreclosures
* Lawsuits
* Court judgments
* Tax liens
What to Look For in Your Credit Reports
The credit reporting industry collects billions of pieces of credit history information every month, so errors and outdated information do occasionally pop up. Be sure to look over every part of your credit report carefully and mark down any errors you find. If you find an error in a report from one credit bureau, make sure to check the others for the same error, since you’ll have to correct each error in each report (see How to Fix Credit-Report Errors). In particular, look for the following:
In the Identifying Data:
* Incorrect or misspelled name
* Other inaccurate identifying information, such as a wrong Social Security number, marital status, birth date, or address
* Outdated or incorrect employment information
In the Credit History:
* Accounts that are not yours
* Accounts that are reported more than once
* Incorrect account histories, such as late or missed payments that you paid on time
* Late payments that are more than seven years old (after seven years they should disappear automatically from your credit report)
In the Credit Inquiries:
* Credit inquiries that you didn’t initiate
* Credit inquiries that are more than two years old
In the Public Information:
* Paid liens or court judgments that are listed as unpaid
* Accounts that were charged off through bankruptcy but are still shown as past due
* Paid liens or court judgments that are more than seven years old
* A bankruptcy that’s more than 10 years old or isn’t listed by its specific chapter
* Collection accounts or charge offs (other than a bankruptcy) that are more than seven years old
Evidence of Identity Theft
In some cases, a mistake on your credit reports may not be the result of simple human error but is actually a red flag for identity theft. The most common credit report errors stemming from identity theft are:
* Accounts you didn’t open
* Unauthorized changes to familiar accounts
* Authorized account users you didn’t authorize
* Credit inquiries you didn’t initiate
* Addresses where you haven’t lived