Tracking down your credit reports is the easy part. Trying to navigate your way through the sections, figure out what to focus on and decode the information is what can leave you feeling lost. The bad news – to protect your credit scores and your ability to get credit in the future, you’ve got to check your credit reports regularly for accuracy. The good news – there’s a light at the end of the tunnel!
Your credit reports from TransUnion®, Equifax® and Experian® ALL have the same basic elements.
Here’s a general breakdown:
YOUR PERSONAL INFORMATION
Your name, date of birth, places of employment and address history are used to identify you and to keep your credit information separate from that of other people. It’s common to see a few variations of your name that you’ve used on credit applications over the years, such as your married name, maiden name, with and without a middle name, etc.
This is a detailed list of your open and closed credit accounts. These include credit cards, mortgages, car loans, personal loans and lines of credit.
Each account listed will show:
- Date the account was opened and account status. Shows creditors how well you manage your debt obligations.
- Credit limit and balance. Details the amount of credit extended to you – and how much of it you currently utilize. Using too much, or too little, can make you look riskier to lenders.
- Payment amount. Shows the minimum payment amount due each month to avoid penalties.
- Payment history. Summarizes your on-time, late or missed payments. Just one late payment reported by creditors can impact your scores and stay on your credit reports for up to seven years.
A credit inquiry is a credit check. When a company or person requests to see your credit profile, a credit inquiry may show up on your credit reports. There are two types of credit inquiries:
- Hard inquiries. Occurs when you apply for a loan from a financial institution (for a mortgage, car loan, credit card or student loan), landlords or property management companies – and even potential employers when you’ve applied for a job. Even one hard inquiry on your credit reports can knock a few points off your scores. However, checking your own credit is a “soft inquiry” and will NOT hurt your scores.
- Soft inquiries. These do NOT hurt your credit scores – and happen when you check your own credit or when credit card companies want to send you a promotional offer.
Both types of inquiries will include the name and address of the organization, as well as the date. Make sure that all hard inquiries were authorized by you and that they fall off your reports after two years.
These are accounts that your creditors have turned over to debt collectors. Collection accounts are very damaging to your credit scores as they signify debt that you have failed to pay back.
Having a public record on your credit reports is not good news for your scores. Public records can include a bankruptcy, foreclosure, tax lien, civil suit or court judgment.
Your credit reports are only as accurate as the information provided to TransUnion, Equifax and Experian.
All of your credit transactions are reported monthly to credit bureaus. Reporting errors do happen – and whether minor (a misspelled name or incorrect address) or serious (a false delinquency or account turned over to collection that doesn’t belong to you), the impact to your credit scores can catch you off guard.
In fact, one in five people have errors on their credit reports that may affect their scores.
Check to see that the information listed for each of your accounts is accurate. And compare your credit reports across all three bureaus! If you spot errors or inconsistencies, don’t hesitate to file a dispute with TransUnion, Equifax and Experian.