How to Read a Credit Report
By Rachel Seitz
If you’ve applied for any type of credit, such as a credit card, car loan, or student loan (including one from Climb), the decision you received was directly influenced by what's in your credit report. Many of our previous posts have touched on the importance of your report and how to see yours, so you know why you should be aware of what’s on that report and how to get it for free at annualcreditreport.com. But now that you’re looking at it, how do you read it? In this post, we’ll go through the sections of your credit report — personal information, credit history, public record, and inquiries — and how to decipher what’s contained within each section.
But before we begin...
First off, you should know that there are actually three different credit bureaus: TransUnion, Experian, and Equifax. Each of these generates their own report, and a lender will report entirely to one bureau but only partially report to the others. Thus, they may have different information contained within them. Just because TransUnion says you’ve paid all your bills on time necessarily doesn’t mean Experian agrees. If a company wants to pull your credit report, they’ll do so from at least one of the three, but how many and which ones depend on the individual company (a big bank, for instance, might use all three). So you’ll want to be sure TransUnion, Experian, and Equifax all have accurate information on you.
The first section of your credit report is dedicated to who you are. Here, you’ll see the various pieces of information that have been used to identify you, both currently and in the past. So, if have two phone numbers associated with you, both might be on the report. And if you often go by your middle name, this will show up under “Also Known As.” Identifying features which may be located here are:
Name (legal, aliases, and alternative spellings)
Address (current and former)
Phone number (current and former)
Year or date of birth
Driver’s license number
Social security number
Note: You may see some slight variations in this section, such as name misspellings or a second, mistyped social security number; sometimes letters and numbers get transposed when reported and they’re simply left on the report to maintain consistency. These are often nothing to worry about, but if you have a concern, you can absolutely contact the credit bureau to find out more and check if it’s something that should be corrected.
After your personal information, there’s your credit information. This is what you’ll really want to pay attention to, and if you see a mistake, you definitely want to get it corrected. Here you can see information on all of the individual accounts (or “trade lines”) in your name and whether they’re in good standing or in poor standing. Relevant information will be listed for each account, and this may include:
Date account was opened
Responsibility (whether the account is just in your name or if you have a co-borrower)
Account type (loan/installment, real estate, rental, revolving credit, line of credit, or collection)
Balance (how much is still owed)
Date updated (date the account was last reported)
The total amount of the loan or the credit limit
Monthly payment amount (how much is due each month)
Recent payment amount (how much was paid on your last reported payment)
High balance (the highest balance reached on a credit card)
The status of the account (open, paid, refinanced, etc.)
Past due (do you have late/missed payments)
Payment status (whether the account is current or late)
Payment history (payment status for each month)
Once again, since there are three separate credit bureaus with different reports, the formatting of this section and even the information contained within will often be different. Reading through this section carefully, though, helps ensure that there are no mistakes on your credit, trades you have forgotten about, or — most importantly — identity theft that would adversely affect your credit!
Then, there’s the public record portion. This section includes everything in your public record that's related to financial issues. So that time you got a bit too carried away celebrating your team’s World Series win and ended up spending the night in jail? That won’t show up. However, a bankruptcy filing, tax lien, wage garnishment, or judgement will. Information shown under your public record are:
The final section of your report is inquiries. This is every time your report has been pulled by a company per your request for credit. Say you take out a private student loan; the loan company will make an inquiry on your credit and pull a report. Next year, you apply for a credit card, and that company also pulls your credit. Under the Inquiries section on the report pulled by the credit card company, the student loan company will show up along with anyone else who has pulled your credit in the last two years. When you look at this section, be sure to note who has pulled your credit and if they had a reason to:
Contact information (address and phone number)
Date of inquiry
Type of business
Date the inquiry will be removed
So, now that you know where to get your report and how to make sense of it, you’ll be better equipped to monitor its accuracy and fix any mistakes that may appear. This will help make sure your credit score is as strong as it can be!