Once you have a copy of your credit report, it can be extremely confusing.  What do all of those numbers and code phrases actually mean?  Also, you need to obtain copies of all three reports, because the information can be different on them.

Credit reports are typically divided into four sections; identifying information, credit history, public records and inquiries.  The indentifying information is just the data that defines you- be sure that your name, address and everything else has been recorded correctly.

Credit History- This section of your credit report contains each account you’ve ever had, including the name of the creditor, account number, the date the account was opened, the type of credit (installment or revolving), and whether the account is yours alone or held jointly with another person.

Account data will also include the total amount of the credit, the highest balance on the card (ever) and how much you still owe on the account. It will normally indicate whether it has fixed monthly payments or a minimum monthly amount, and will indicate whether the account is open, inactive, paid, closed, settled, or some other status.

Creditors especially like the section that indicates how you’ve been making payments on the account.  Experion spells it out in plain english, “Never been late”, or “typically pays 30 days late”.  Other reporting institutions may use codes like “internal collections” or “charge off”.  When reports use codes, there will be a table someplace on the report that helps you decipher what the codes mean.

Public Records- you want to have nothing in this section on your credit report!  If there is something here, it means you’ve had some financial issues at some point, including bankruptcies, judgements or tax liens.  This section will lower your score faster than any data anyplace else on your credit report.

Inquiries-  This is the section that shows a list of creditors and lenders who have accessed your credit report.  It’s actually divided into two different sections, the “hard” inquiries- which are things you’ve initiated yourself by applying for credit; and “soft” inquiries, which are from companies who are mailing out pre-approved offers.  Soft inquiries cannot be taken into consideration when your credit score is created.

As you are viewing your credit reports, watch for anything that may be an error.  You want to dispute it as soon as you see it and try to get it corrected.  Since more life events are taking the credit report/score into consideration (applying for a new job, your car insurance, getting credit), it’s important that the information on your report be as accurate as possible.

How to Read Your Credit Report was created by and is property of American Consumer News.