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The Basics of Credit Report

By Karen Anderson
Published: Thursday, November 5th, 2009

Before we go into the intricacies of knowing credit report tips, we must first answer the basic question of what a credit report is. How much do we now about them? More importantly, do we really understand them? Having a good grasp of a credit report is important for it enables us to analyze the things that we could improve or avoid in order to maintain a good credit record. A good credit record in turn is indispensable in widening our financial opportunities.

First of all, where do credit reports come from? There are what we call credit reporting agencies or CRA whose main function is to gather and organize credit and financial information into a report.  The most common type of CRA is the credit bureau. One of the credit report tips that would surely help us is being able to identify legitimate CRAs. The three main credit bureaus operating in the United States are Experian, TransUnion and Equifax.

One of the difficulties we encounter in understanding credit reports is that they are primarily composed of coded information. Of course, it is through the use of codes that the processing of information becomes effective. To a lay-person however, the codes only add to the confusion. Among the vital credit report tips available is locating the key for the codes which would help us understand the report better.

What are the kinds of information contained in our credit report?  Accordingly, the types of information can be broadly categorized into four: identification, public records, credit history and inquiries.

The identification section lists down our personal data like our name, address, employment, marital status, and date of birth. Of course, it also contains the all important social security number. The next section reflects our public records like lawsuits (e.g. liens or legal claims on our property), bankruptcies, and foreclosures among others.

The main content of our credit report however is detailed information about our credit history. Focusing on this section is another imperative among other credit report tips. After all, this is also the section that our would-be creditors would analyze more carefully.

Our credit history usually contains information like the names of our creditors and the dates of our last payment activity, to name a few. Our payment history is also reflected, so much so that even the number of days we paid past the due time is shown. Our account’s information like the current balance, credit limit and the status (whether open, closed or in collections) is also entered into the report.

 The final section of information is devoted to credit inquiries. Accordingly, inquiries appear on our file every time we apply for credit or whenever a creditor checks our file after we have applied for credit. Routine credit analysis done by our current creditors and inspection by our employers or potential landlords also qualify as an inquiry. There are several credit report tips available, but familiarity with the information contained in our credit report should hold top priority.

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