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Interpreting your credit report

By Ruth Racey
Published: Wednesday, October 7th, 2009

The first time you receive your credit report it will probably appear Greek to you. This is not very unusual. Many people have experienced the same difficulty the first time they received their reports. However, it is actually very easy to understand once you spend a few minutes trying to decipher what it means. At any rate, how to read a credit report is something you need to learn. 

Reports from all three credit bureaus are usually similar in form. All are divided into segments. At the top part of the page, you will find your name, address and social security number printed. Immediately following that is the name of your employer. Your credit history, located at the next section, is very important. Spending some time poring over details of debts and payments will give you a good idea of your current financial situation.

Included in the history section is a list of institutions which granted each loan. Bank, auto, mortgage loans, government and even college student loans are listed. The types of loans are also considered, and the total current loan is the highlight of this section.  

Other interesting information found in this section includes your available credit for each company you are associated with. There are entries which show how many times you have been late in paying amortizations or completely missed paying them. If you obtained reports from all three bureaus, information in this aspect of your credit history might differ from one bureau to another. 

The credit report will not be complete if judgments against you are not reflected.  Bankruptcies you might have filed as well as liens or claims filed by other parties against you will be there to complete your credit history and become part of the basis for computing your credit score.

There is the “inquiries” section as well, which lists down people or agencies who have viewed your report. Incidentally, anybody who might be interested in your credit history can access the report anytime. A good number of companies or individuals looking at your record can be an indication that you are not considered as a good risk.

However, credit reports are not expected to be accurate all the time.  Bureaus also make mistakes. You might see something in your report that you do not expect to see. In such cases, it is your responsibility to communicate the error to the bureau and make sure that corrections are made. You can improve your score just by being able to read a credit report.  Unfortunately, your credit score is not included in the report, but since you know how to read it, you will have a good idea what your score might be.

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