When building your credit or being vigilant about avoiding identity theft, it is important to check your credit report regularly. While the credit score may be the most talked-about item on your credit report, the credit report is bigger than just a numerical rating. The credit report itself is a detailed listing of all your debts and payments, going back through your entire payment history. For each credit account you have, the report shows creditors’ names, the amount owed, the highest balance owed, available credit, whether the account is open or closed (and who closed it), the number of times payment was past due and whether the account is in default.
Each of the three nationwide credit reporting agencies (Experian, Equifax and TransUnion) will provide you with a free credit report once every 12 months, upon request. But when you receive that credit report, it is not always easy to know what to look for or what to do if you believe the report contains incorrect information.
The sort of errors that can creep into your credit reports include an account that is not yours, a payment made on time, but classified as a ‘late payment’, or a paid debt still listed as in collections.
The information in your credit report affects whether you can get a loan – and how much you will have to pay to borrow money. It could also affect the hiring decisions potential employers may make about you. So if you find something wrong with your credit report, dispute it. Be on the lookout for loans or credit cards listed that you never opened, misspelled names, or collection items that were not updated to show the account’s current after a settlement was reached and satisfied. You can file your dispute with both the consumer credit reporting agency and the entity that furnished the bad information.
The five sections of your credit report include:
Identifying information. This is where you’ll find your name, address, date of birth, Social Security number and aliases. It is recommended that you review this information carefully to be sure it is accurate. If not, you could be held responsible for debts that are not yours.
Creditor information. Usually the longest section, this is a list of every credit account you have had, with information about the lender, how much you owe, whether the account is current or past due, whether it is open or closed and other status information. Review it to make sure each account belongs to you and that all information is accurate.
Collection accounts. This section will list any accounts in collection. If your report shows some, make sure it is accurate.
Public records. Here, you’ll find information about public financial records such as bankruptcy judgments, liens and overdue child support. Again, review for accuracy—serious financial problems and bankruptcy filings could remain here for seven to 10 years.
Inquiry section. This is a list of businesses that have reviewed your credit report.
If your score is not where you want it to be, make sure to get and stay current on your bills and make a plan to pay off that revolving debt. You should check your credit reports at least once a year to make sure there are no errors that could keep you from getting credit or best available terms on a loan. Be sure the information in the report is accurate and up-to-date.
