Before you file for bankruptcy or can even begin to determine just how affected your credit score has been by past debt, you need to take a look at your credit report. But, understanding the information in it can often be frustrating to the untrained eye. There are countless numbers, abbreviations and codes lining the pages that probably don’t mean much to you at the moment. If this is the case for you, read on to learn how to interpret your credit report.
FICO, developed by the Fair Isaac Corporation is the scoring system most often used to determine if you’re a credit risk or not. You’ll find that credit reports are most often divided into sections that categorize your personal information- public records, credit history and inquiries to your credit report.
One of the sections on your credit report will always contain your name, address and social security number. This is the most basic of information about you, but it’s essential you check to see if it’s correct. You’ll also find past addresses, your date of birth, phone number and employer information in this area as well.
If you have filed bankruptcy or have accounts in collection, this information will show up on the public records section of your credit report. Make sure that this section is correct as well, because any information in it can bring your credit score down drastically.
The portion that can be the most intimidating for people to read is
credit history. Here, you’ll find information on every single account
you’ve ever opened with a creditor. From open accounts to closed
accounts, they’re all here and they detail your payment history.
Different bureaus explain this portion in different ways. For example,
Experian’s credit report is fairly easy to read and will offer notes in
laymen’s terms, such as “pays on time” or “pays 60 days late.”
Unfortunately, they are not all like this. Other agencies use numbers
in a table to report details on each of your accounts and you will have
to check another page on your report before you can understand what
they mean.
The inquiry section will tell you who has been requesting a copy of
your credit report. Any time you apply for a loan, vehicle, apartment
or credit card, an inquiry is marked on your credit report.
Understanding your credit report might take some time, but practice
does make perfect. Make sure you check your report regularly for any
inaccurate information. Remember, any time you are denied credit, you
can request a free copy of your report. Once you get it, check for
errors and discrepancies and dispute any that you find.
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