Each credit reporting agency will format their credit reports a little differently but they will all contain the same type of information. It is very important to look at these reports at least once per year and review them to make sure they are accurate. Having inaccurate information on your credit history can have a negative effect on your score and end up costing you more money down the road. Understanding what is on your report and how to read them is essential to monitoring your credit.
Personal Identifying Information
One of the first things you will see on your credit report is usually your personal profile. This information includes things such as your name, address, birthday, social security number, past jobs, and marital status. This information does not have any effect on your actual credit score but you should make sure they are correct. Having incorrect information here can cause headaches down the road when trying to apply for loans.
This area will list all the credit accounts that you have opened. This will show what type of credit account you opened, the date the account was opened. These include such things as credit cards, mortgages, auto loans, and any other type of loan or line of credit you might acquire. This section will also show you when the account was opened, what the loan amount is, or if it is a credit card, the credit limit, and the balance on the account. You can also see your payment history for each account to see if you had any late payments or not.
The next section of your credit report will list everyone who accessed your credit report within the last two years. When you apply for a loan, you are authorizing your lender to look at your report and it will be noted in this section. There are two different types of inquiries. A soft or voluntary inquiry is something that is triggered by your own request. These will not usually show up on your credit report. The involuntary or hard inquiries are ones that are made by third parties, especially lenders to see if you qualify for a loan. Having too many of these types of inquiries on your credit report can actually have a negative effect on your credit score.
Public records such as foreclosures, liens, and bankruptcies will also be listed on your credit report. You want to pay extra attention to this area to make sure that all items are accurate. Sometime you may settle with a collection agency but they will forget to remove it from your record. Keeping this area as small as possible is a must for good credit.
The one item that everyone is interested in is your credit score. This is the all mighty number that lenders will look at to determine if they will give you a loan or not. It is extremely important that you keep track of your credit score. You do not want it to get low. The lower your score, the more difficult it will be for you to obtain credit. You will most likely have to pay a much higher interest rate on money that you borrow the lower the score you have.