What Do You Need to Know About a Credit Report?

Want to know how to read a credit report? Well, before knowing how to read one, you need to know what exactly a credit report is. In simple terms, a credit report is the complete snapshot of your financial life. The report plays an important role when you apply for a loan, credit card, or even insurance. Now, this guide will tell you all about a credit report in detail and how you can read it. 

Introduction to a Credit Report

A credit report is kind of a detailed record of your credit past, covering stuff like loans, credit cards, how you’ve been paying, and whether you’ve filed for bankruptcy. Lenders, insurers, landlords, employers, and other people use it to judge your creditworthiness. For instance, details in the report can affect your loan interest rate or decide whether you get approved for an apartment. 

The three main credit bureaus- Experian, Equifax, and TransUnion- each build a report on you with info drawn from public documents, like property and court records, and also from lenders, like banks and card issuers. But not every lender reports to every bureau. So, each bureau report can end up with different information. That’s why it’s important to routinely review all three.

How can you read your credit report?

Different credit bureaus may have different headings, but the main sections are generally the same in a full credit report, as we are mentioning here.

• Personal information  

This part has your name, past names, and small variations, like with or without a middle initial. It also lists your current and former addresses, phone numbers, Social Security number, and your date of birth. Your spouse, any other co-applicants, and even current and past employers may show up too.

• Accounts  

This is basically the main section. It covers your loan and credit card accounts, the date they were opened, the loan amount or your credit limit, what you currently owe, and your payment behavior. If you had any late or missed payments, this is where they show. The data is usually refreshed monthly, not daily or anything.

• Collections  

Here you’ll see accounts that are seriously overdue, whether the original creditor kept it in-house collections, or whether it was sold to a collections company. Besides loans and credit cards, it might include cable, cellphone, and utilities. Medical bills in collections only appear on credit reports if they are over $500 and they’re older than one year.

• Bankruptcy 

The following information is used to draw your credit score report. This information is taken from court filings and includes whether you have filed in the court either Chapter 7 or Chapter 13 bankruptcy, along with the date of the filing. 

• Hard and Soft Inquiries

Lastly, you will also find a hard and soft inquiries section in your credit report, which mentions the name of anyone who has checked your credit in the last 2 years. It can involve businesses, lenders, credit card companies, or others. 

With this information, your credit score is determined, which gives financial institutions an overview of your financial life. 

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