How To Read A Credit Report

A credit report contains information about your financial activities, whether it’s opening a new credit card, taking out a loan, or paying a bill. It is also the document creditors use to determine whether to extend credit to you and to set your credit limit and interest rate. Because a credit report provides a comprehensive snapshot of your financial transactions, the Federal Trade Commission recommends a regular review of your credit report as an important tool for discovering identity theft. But determining if something is incorrect in your credit report can only happen if you know how to properly review one. Here’s an easy tutorial on reading a credit report and the things you should look for that could be warning signs of identity theft.

Credit Report Components

A credit report is comprised of four main sections:

1. Identifying information – contains your name, current and previous addresses, phone number, date of birth, social security number, driver’s license number, name of spouse, and current and previous employers.

2. Credit History – lists your bill paying history with mortgage companies, banks, finance companies and stores in which you have credit card accounts. Data includes the type of credit, when you opened the account, the credit limit, the amount owed on the account, monthly loan payment amounts, payment history for several years, and whether it is an individual or joint account. Statements of dispute are also listed with the credit information that is in question.

3. Credit Report Inquiries – displays the name of potential lenders or credit card institutions who have requested to view your credit report.

4. Public records – contains activities, such as tax liens, collection accounts, bankruptcies and court judgments, that impact your credit.

Credit Report Inaccuracies To Watch Out For

There are certain areas of your credit report that should be examined carefully to ensure that no one is attempting to or has stolen your identifying information. They include:

  • Any errors to your personal information. Keep a watchful eye on any unauthorized changes to your name or initials, current address, social security number and employers since identity thieves often try to change this information so they can receive your personal information and use it to open up accounts in your name. If any of your personal information is incorrect, contact the consumer credit reporting company and dispute the error immediately. Also check with the other credit bureaus to see if they have the same incorrect information.
  • Look to see who is making credit report inquiries on your account. If it is a company or financial institution you’ve never heard of, research the company or contact the consumer credit reporting company to investigate further.
  • Review your credit history carefully and report any debt from financial institutions, store accounts, or credit card companies that you have never done business with, whether currently or previously.
  • Look for any accounts listed under your credit history that you did not open.
  • Review the public records section for any activity against you, such as collection agency pursuits, that you know nothing about. Contact the collection agency for paperwork related to the account. Once you determine the mistake that occurred, contact the agency and ask them to write a letter to you and the three credit bureaus correcting the problem.

    • Related Topics: Identity Theft Resource