How to Read Your Credit Report

Do you know how to interpret the contents of your credit report? In this post, let’s take a closer look at the details you can find in your report and what you can do to fix possible errors.

Your Credit Report

Your personal credit report is divided in four sections – personal identity, credit history, public records (if any), and credit inquiries made by lenders, insurers, and other sources where you may have submitted a credit application.

The first section contains personal details such as your full name, past and previous residences, employment history, Social Security Number, Driver’s License Number, etc.

The second section is credit history. Here, all your transactions with creditors are recorded such as the type of account you have, the amount of debt you have, your payments, balances, etc.

The third part is the public records section. This is where you can find legal remarks or court judgments such as tax liens, bankruptcy, foreclosures, etc. Ideally, this part of your report should be blank or free from any derogatory remark.

The last section is where you can check all inquiries made by potential creditors, insurers, employers and other companies to whom you may have submitted an application. You may also find other inquiries from companies who are interested in offering you credit even if you did not submit an application. These inquiries are called soft inquiries and will not damage your credit score.

Your Credit Report Score

The FICO system is used to calculate credit history. It ranges from a low score of 300 to a high of 850. Lending companies have varying qualifications when it comes to approving credit ratings. Generally, a score of 700-750 is considered as good while a score of 750-800, excellent.

Of course, if you have a higher credit score, you are more likely to get the quickest approval. Furthermore, an impressive rating gives you the power to make demands such as a lower interest rate, a higher credit limit, and more flexible terms.

A score of 650-700 is regarded as fair which means your application may or may not get approved, depending on the lender’s credit standards. A score that falls below 650 or 600 is obviously a bad score. If you have poor credit rating, your only chance of getting approved is to apply with a subprime lender.

Improving Your Credit Report Score

If you’re planning to apply for a credit card or a loan, order a copy of your credit report before submitting application. What can you do if you have bad credit?

You can improve your credit rating by paying off past due charges in your accounts. If it’s not possible for you to pay all your debts at once, call up your creditor and negotiate for an easier repayment term.

If you are struggling with debt, you can also get a free credit repair guide from a trusted non-profit credit counseling agency nearest to you.

 

4 comments

  1. equifax credit report agency

    Review the credit report thoroughly and update the information immediately.
    Ultimately, this means your credit rating will remain stagnate for a while.
    And it is within your rights to challenge any errors that you may find.
    You do this by checking that your name and middle and last
    name are accurate or not misspell apartment or condo number, zip code, social security number, zip code, etc also correct.
    Thus, the creditor can continue to use garnishment, levies and
    liens as legal collection tools throughout the remainder of your state’s enforcement period even if you remove the money judgment from your credit report. This is done to check whether the client is qualified for the loan or not. There are financial bureaus available that can help prepare your credit report online. A global leader in information solutions, we leverage one of the largest sources of consumer and commercial data, along with advanced analytics and proprietary technology, to create customized insights that enrich both the performance of businesses and the lives of consumers.

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