Credit reports have become a common thing when it comes to our finances. You require good credit scores to find favorable interest rates on credit cards and loans. Anyone can log onto AnnualCreditReport.com and view their credit report for free and even download it once a year. Federal law allows you to look at your credit report from Equifax, TransUnion and Experian. When looking at your credit report, there are different sections for you to evaluate.
Sections of the Credit Report
When looking at your credit report, you will see it divided into different sections.
- General Information. This section is normally at the top when looking at your credit report and details general information about you such as your address, name, date of birth and social security number. This information is used to track your credit activity. The credit bureaus get this information from the lenders and try to keep it safe, but the information may not always be accurate.
- The second section you will see when looking at your credit report is the most important and lists all your past and present credit accounts. Usually, you will have accounts that are categorized as adverse meaning potentially negative, such as overdue accounts and debts that have been sold to collection agencies, and accounts that are satisfactory meaning the good accounts.
- The third section you see when looking at your credit report shows your public records, such as bankruptcy details or action taken against you for unpaid debt such as court judgments.
- The final section you see when looking at your credit report is the inquiries or credit history requests section. Here you will see any credit checks that have been recently done by a prospective lender such as a mortgage or car loan provider who uses the information to decide whether to award you the loan.
Scan the Report for Errors or Problems
When you finish looking at your credit report for the first time and have an idea of what is on it, the next thing to do is to go through the credit report again, this time paying close attention to what you see in order to find out if there are any problems or errors on the report that need fixing. Errors on credit reports are very common and so be alert when looking at your credit report as any errors can badly damage your finances.
- Go through your personal information to ensure that it is correct. If you do not recognize a phone number or address when looking at your report, get this sorted as it could cause you problems in the future. This could mean that your credit file has been mixed up with the credit file of another person especially if you two share a very common name, and the credit history of someone else might have been listed on your account.
- When looking at your credit report, pay close attention to the accounts section to spot any accounts that are not familiar to you, especially the adverse accounts. For example, if you see an account from a certain bank listed as unpaid or marked as late payment and you are very sure that you have never dealt with the bank before, then that error will need to be corrected. You will also need to fix accounts that may show an unpaid balance with a debt collection agency you have never heard of.
- Ensure that your payments have been accurately and properly recorded. You do not want to be penalized for anything you didn’t do and for your lender’s mistakes. So double check all payments marked as late to be sure that there is no inaccuracy.
Fix the Errors
If any errors are discovered while looking at your credit report, you will have to fix them. The process of fixing errors on credit reports is not an easy one and can be frustrating at times but perseverance pays off. Start by getting in touch with the credit bureau(s) where the errors appear, inform them of the errors and ask for the errors to be removed from your credit report. After some time, check your credit report to ensure that the error was removed and your information corrected or changed.
If your credit report has problems because of you not paying debts, you will have to devise a plan that will help you solve these problems in the long term by contacting whoever owns the debt. If your credit score is poor because you don’t pay your debts on time, come up with a plan to pay the debts as quickly as possible. There are many resources available to help you with this.
A secure financial future starts with you knowing what to look for on your credit report.