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Understanding Your Credit Report

By Janet Lacey
Published: Sunday, September 20th, 2009

Are you planning to go in for a mortgage? Then you must be ready with your credit report. In fact, any major financial dealing you might have will need a credit report. This is one of the most important financial documents you must have. However, you also need to understand it. You need to know what the many numbers stand for. This is not an easy task. There are many numbers in many columns and abbreviations and many different terms. You do not have a clue what anything stands for. This article tries to decipher the Credit Report for you.

Let us start with where you can lay your hands on a credit report. There are three main credit reporting agencies in United States. These are Experian, TransUnion and Equifax. You can order a copy of your credit report from any of these agencies. A new federal law allows us to get a free credit report from all three agencies for free. You can order a credit report from annualcreditreport.com. You can also call the number (877) 322-8228. You can also complete the form at the back of the Annual Credit Report Brochure. Order a credit report through the central agency only. If you directly approach the company it will cost you.

The credit report you get is very similar to the report you get when a friend of yours gets one from the bank. However, the credit report from an agency is made easier for you to read and understand. The credit report from the agency will also have a lot more information. The Credit Report has four divisions in it. These include identifying information, credit history, public records and inquiries.

The identifying information is a tool to identify you. Check all the details carefully and verify if they are accurate. Some times you can have different spellings or even multiple social security numbers. However, these variations are caused de to some body reporting the information incorrectly. These variations do not affect your credit report adversely. Do not worry about them. The rest of the information includes your addresses, date of birth telephone numbers, driver’s license numbers, spouse’s name and employer’s name.

Next we come to the most important section of your credit report, the credit history. Each entry will contain a record of the creditor and the account number. This is usually scrambled fro security purposes. There are chances you might have more than one account with a creditor. Other details in an entry include the date you first opened the account and the type of credit whether instalments like in a mortgage revolving like a department store card. It also includes details about the account holder’s name, whether you hold it alone or with some one else, the amount of the loan. It includes details about how much you still owe and what the amounts are of fixed monthly payments. It contains information about how well you paid the account. Experian adds comments in plain English such as never pays late. If there is a comment saying charged off, it means the creditor has given up trying to collect.

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