How to read Credit reports to understand your Credit Score


What is credit report? The credit report is nothing other than the report card of your finances. It shows whether you are doing right or wrong in terms of managing your money. The credit report for your finances are generally generated by the top credit bureaus namely TransUnion, Experian and Equifax. The credit report is created by using the general account information of your financial account(s) along with details about your public records and the number of hard and soft inquiries made in related to your credit.

How to read Credit reports to understand your Credit Score

Have you ever wondered, how to read a credit report like a financial professional ? Moreover, how to know about the different sections of your credit report such as personal information, account history, public records and credit inquiries? Read below to know more.

Personal Information

The primary information that you need to know in any credit report is that of the personal information. It is always advised, to double-check the personal information section of your credit report and find out if there are any errors.

  • Check the birth date along with social security number
  • Be careful to not fall prey into any fraudulent practices
  • Find balance mentioned in the credit report is up to date
  • Report to authority in case any unusual or wrong information
  • Make sure that the name and address in credit report matches

Account History

After knowing about the personal information, you need to have the details about your account(s). There are different kinds of accounts such as loans, debt, savings and many more along with whether it is a joint or individual account.

  • Know the type of account
  • More about the account type
  • Check the credit limit of the loan account
  • Find whether it is joint account or individual account
  • Primary account information include name, address, account number and account open date

Public Records

A vital part that hugely impacts your credit report is the public records that are linked to your credit account(s). This section is used to check about loan status, cases of any bankruptcy and information of any investments that are made.

  • Find any instances of tax liens
  • Used to check for any financial mistakes
  • Stays in credit report for seven to ten years
  • Checks for any high debt, number of loans and bankruptcy
  • Lists all the public records associated with financial account(s)

Credit Inquiries

The last thing to consider at the time of checking the credit report is to know the details about credit inquiries made. The inquiries are generally divided into hard inquiries and soft inquiries and the way it impacts the credit report.

  • Checks about the last two years credit
  • Find the number of credit inquiries made
  • Mainly categorized into soft and hard inquiries
  • Credit inquiries must have the organization address and name
  • Try to have less hard inquiries as possible to improve credit report

Things to Remember:

After you know the details about the information that is found in credit report and how it influences the financial history. It is very important to understand about the different aspects of it in order to improve your credit score. It is always advisable to keep a good credit score and have credit reports without any cases of late loan payments, high debt or bankruptcy. It is very important to have correct information in your credit report and contact authorities like Consumer Financial Protection Bureau in case of any doubts.

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