Credit reports show financial institutions’ information about your payment history, credit activity, and credit account status. They can let us know why our application for a certain loan or credit card was declined. Sure we can get others to read our credit report for us. We could say that we don’t know how to read the report properly so it’s much better for someone with a better knowledge to read it for me. Or that we simply don’t have the time to do it. These can be excuses or they might actually. Regardless, you will need to learn how to read your credit report so you protect your information, your identity and your credit. Here are the six parts of a credit report and how reading them can help.
Personal information section
This contains information regarding your identity like your name, social security number, address, date of birth, and your phone number. Sometimes, there is incorrect information here that you need to file a dispute for or need to update with the corresponding credit bureau. Getting the correct information will reflect any great credit activities that you have onto your identity which would help increase your credit rating.
You can include this in the personal information section and request an update on the information given if they are inaccurate. This helps to verify your identity to have the correct activity reflected in your report.
This is the section where any statements you submitted to a credit bureau is posted. If an investigation didn’t resolve a dispute, the statement found in this section could shed light on why are disagreeing with the information reported.
This is the section for details specific to your accounts which include open and closed accounts, the date when they were opened or closed, your credit utilization, payment history, loan payment status and current account balance. This is where they show which loans you are delinquent on so be sure to peruse this section carefully. This is basically where you prove to lenders that you are credit-worthy. As John Danaher, TransUnion President of Consumer Interactive, says “If you’re paying your bills in full and on time, this section will reflect that the account was paid as agreed.” You should also pay attention to accounts that belong to another person with the same name as you, incorrect payment history and accounts created through identity theft.
This is where activities like foreclosures, tax liens, bankruptcies and civil judgments against you are found. All of these can hurt your report and decrease your credit score.
Hard inquiries are when a financial institution examines your credit standing when someone has applied for credit under your name. If you see any unauthorized hard inquiries under your name, you could be in big trouble because this is an indication that there is an attempt to steal your identity.
Reading your credit report gives you a deeper understanding of your credit standing, and helps you formulate ways to increase your score. If you think you require professional assistance, Blue Water Credit is here to help you with creating a great report. Find out how by going now.