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Know your Credit Report Better

By Andy Snyder
Published: Wednesday, December 30th, 2009

Before we get into understanding the finer details of credit reports, let us first try and define it. A credit report is a record of all your credit activities. For example, it shows what loans are outstanding, it shows how fast you repaid your previous loans, and it also shows whether any action was taken against you because of unpaid loans.

In the previous days, banks or lenders would actually ask for a list of all your previous creditors. Then they would go about contacting each one of those creditors to find out how you handled the repayments. This was their way of ensuring that the customer was credit worthy. But now, there are agencies which track all the credit activities of a person and compile them into a report called as the credit report.

So now let us go into how we must read and understand the credit report. Basically, there are three major credit reporting agencies in the United States of America. You are eligible for copies of the report from each one of these agencies. All you have to do is request for it. You can either mail them through the internet by accessing a centralized web portal. Or you can mail them by the regular snail mail. Else you can personally go and collect it from one of their offices. But do keep in mind that contacting any of these agencies directly is going to cost you money.

Placing an order through the centralized agency is the only way of actually getting it for free. You can get all the reports at the same time or you can get each of the reports at a different time of the year, it’s your choice.

In the report, you will find a lot of numbers and facts. But make sure you order one yourself, don’t get one from the bank by asking your friend to do it for you. The consumer copy is the only one with the maximum information.

The report is generally divided broadly in to four sections. They are the identifying information, credit history, public records and enquiries.

The identifying information consists of matter such as your name, address, and other personal details. It is not uncommon to have a couple of spelling mistakes in this section. But this is okay. Just make sure your name is the same as yours! , Because any changes will take a lot of time to process.

The credit history part will have information like from where you had taken loans. How much loan had you borrowed, and how did you go about paying them. It also will list the inputs from the side of the creditors. For example, are they still looking for the money or have they given up, or are they happy with the sort of relation they are maintaining with you etc.

The public records part will not list arrests or other crimes. It will only list those events like bankruptcies, judgments or liens. This is the part you want to be blank.

Then lastly, we have the enquiries list. This lists all the different enquiries about your credit report and by whom those enquiries were placed.

This basic knowledge will suffice for someone who is looking at his credit report for the first time.

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