How To Read My Credit Report

Your credit report is an official record of your credit history. Whenever you apply for a loan or credit card, lenders and issuers look at your credit report to determine whether you qualify. The healthier your credit report, the more likely it is you’ll be offered better products and interest rates, so reviewing your report regularly is very important.

However, reading and understanding your credit report may not be easy. In addition, you might not know how to identify errors and possible signs of identity fraud. In this article, we’ll walk through the main sections of your credit report, show you what to look out for, and suggest a few professional agencies that can provide you with additional help.

How To Get Your Credit Report For Free

Usually, you should never have to pay to see your credit report. Once every twelve months, you can request a free copy of your credit report from each of the three major credit bureaus, Experian, TransUnion, and Equifax. You can do this online at AnnualCreditReport.com.

Personal Information

Typically, a credit report will begin with your personally identifiable information (PII). This includes your:

• Legal name(s)
• Date of birth
• Social Security Number (SSN)
• Current and past addresses
• Employment history
• Phone numbers

What To Pay Attention To

Verify that all your information is entirely correct:

• The most common errors people usually find are with incorrect addresses or employer information. This may be a sign that the credit bureau has mistaken you for someone else, or it could be a case of identity theft. 
• If you have multiple names or nicknames, you may see these variations show up on your credit report if you have used them to apply for credit (i.e. Jim Doe, Jimmy Doe, James Doe). This is normal. However, any name that is misspelled or unrecognizable should be a red flag. Pay especially close attention to this if you have a common name or share the same name with a family member.

Account Information

The main section of your credit report is the Accounts section, which gives a detailed overview of your credit history. Every single one of your credit accounts from the last seven to ten years (open and closed) will be listed here along with the following information:

• Type of account (i.e. credit card, mortgage, student loan)
• Date of account opening and closure, if applicable
• Credit limit or loan total
• Recent account balance & highest account balance
• Payment history (including late payments)
• Co-signer information

Multiple aspects of this section can play a big role in determining your credit score. For example, payment history accounts for 35% of your FICO Score. This means that any reporting errors here could significantly boost your credit score if they are fixed.

What To Pay Attention To

Start off by ensuring that you recognize all the listed accounts:

• Take note of suspicious accounts that you don’t recall opening.
• Sometimes, you may see an account that’s listed as open but should be closed, and vice versa.

For the accounts that you do recognize:

• Verify that all the information is accurate and up to date, especially credit limits, loan totals, and outstanding balances.
• The most important and time-consuming part should be checking your payment history. In particular, you’ll want to notice any late payments that you actually paid on time.
• Sometimes, you may accidentally be listed as the owner of a credit account when you are an authorized user.
• Take note of your closed accounts. If the account was in good standing and there are no negative marks associated with it, then you should leave it alone. However, if it has negative information, it may be possible to appeal to the credit agency and remove it from your report.

Public Records

This section will list any public records related to debt, such as:

• Bankruptcies
• Foreclosures
• Repossessions

What To Pay Attention To

Anything that is reported here is a serious negative to your credit score, so ideally this section is empty. However, if you do see something misreported here, be sure to note that down immediately.

One important point here is that only public records relating to debts can show up in this section. Examples of public records that should not show up here include:

• Tax liens (credit agencies stopped reporting this in 2018)
• Speeding tickets
• Divorces
• Lawsuits

These public records should not affect your credit. If you see them on your credit report, note that down.

Credit Inquiries

This section lists all lenders or creditors that have requested your credit report over the last two years. There are two types of inquiries:

• Soft inquiries: When you or a current creditor checks your report, this is a soft inquiry. These do not affect your credit score.
• Hard inquiries: When you apply for a new credit card or loan and a creditor checks your report, this is a hard inquiry. These can lower your credit score by a few points in the short-term.

What To Pay Attention To

Since only hard inquiries affect your credit score, we can ignore the soft inquiries. For each listed hard inquiry:

• Ensure that each one is the result of you actually applying for a new credit card or loan. Hard inquiries should not show up unless you have explicitly authorized a creditor to pull your credit report.
• Verify the date. Typically, hard inquiries should disappear from your credit report in two years. 

Other Sections (Consumer Statements)

Sometimes, you may see additional sections in your credit report. The most common addition is the Consumer Statements section, which shows up if you have disputed something on your report before. If your dispute was rejected, you have the option to provide a statement here to give lenders context on any negative information in your report.

What To Do About Incorrect Information On Your Credit Report

By now, you should have gone through your entire credit report and made notes on what is outdated or inaccurate. If everything looks correct up to this point, that’s great! You can simply focus on improving your scores.

Otherwise, you’ll want to dispute these inaccuracies. For each error, this typically involves the following steps:

• Gather evidence to support the dispute. For example, you might use a credit card or bank statement to dispute a late payment.
• Write one letter to each credit agency and creditor involved with the dispute. The Consumer Financial Protection Bureau offers sample letters to help you get started.
• Mail the letter to each credit agency and creditor. You can find the addresses for the three major credit bureaus on the Federal Trade Commission’s website.

Once the credit bureau receives your letter, they usually must complete an investigation into the dispute within 30 days.

Professional Services To Help You Read and Repair Your Credit Report

It’s definitely possible for you to read through your credit report and dispute all inaccuracies by yourself. However, hiring a professional service to guide you through this process can be a good idea for many reasons:

• You want professional and individualized guidance.
• You are unsure whether something on your credit report can be disputed.
• You are potentially dealing with a case of identity theft.
• You need help writing dispute letters.
• You want personalized tips on how to improve your credit score.

Choosing the right service can give you peace of mind knowing that they will handle disputing errors on your behalf. However, don’t just sign up for any service. Here are three proven professional services that you should consider.

Conclusion and Next Steps

Experts generally recommend reviewing your credit report annually, particularly if you are trying to repair a bad score. As such, learning how to properly read your credit report and dispute errors is an essential skill to learn.

We highly encourage you to request a copy of your credit report today and review it for errors. Should you find any, you can then decide whether to dispute them yourself or hire a professional service for more guidance.