Regularly checking your credit report is one of the best ways to prevent identity theft. These reports are available for free every twelve months from each of the three national credit reporting agencies, Equifax, Experian and TransUnion, as mandated by the United States Fair Credit Reporting Act. It is important to get regular copies of your credit report to ensure that all your information is in order and to keep track of your credit score, which is a vital part of any credit, insurance or job application.
The three credit reporting agencies have slightly different reporting formats. However, all credit reports will have the following sections:
Your credit report will usually start with a section on your personal information. This includes details on your name, address, employer, and sometimes previous employer(s). You may spot variations or misspellings of your name. Credit reporting agencies will usually leave this information in to maintain links to your credit information.
The credit summary breaks down your accounts by account type. The section will tell you how many accounts you have, the balance by account type, and whether they are current or delinquent. It will also include information on accounts you have opened and closed as well as public records and the number of inquiries your file as received within the last two years.
Credit reporting companies track various account types including
– Real estate accounts and mortgages
– Revolving accounts, e.g., credit cards and lines of credit
– Installment accounts, e.g., personal loans
– Other accounts
– Collection accounts
This section provides a detailed breakdown of each account. It will typically include information on the creditor, an account number, which is often disguised for privacy, and an account type. It will also provide you with details on when the account was opened, the monthly payment due, the balance on the account, the highest balance in the history of the account, and the amount that is past due as well as a monthly payment status from the time the account was established.
While this section may be painfully detailed, it is important to make sure that all the information is correct and up to date, particularly the details on your repayment history. Any errors will negatively affect your credit score, which will in turn affect your chances of obtaining loans, credit cards, and even jobs.
Information on your public records will appear in this section. This includes details on any financial-related public records like bankruptcy filings, judgments, tax liens, state and country court records and sometimes even overdue child support. Criminal convictions will not appear in this section or elsewhere in your credit report. This information can remain on your credit report for between seven and ten years and will have a large negative impact on your credit score.
Finally, you credit report will include a section on any credit inquiries within the last two years. Your report will include both “hard” and “soft” credit inquiries. “Hard” inquiries are those initiated by lenders in the process of processing your credit application. This information will be shared with any lender that requests a copy of your credit report. However, “soft” credit inquiries, which are made by lenders for promotional purposes, will not appear in the credit reports for lenders.
It is important to regularly check your credit report to make sure your records are up to date. If you find any discrepancies, be sure to file a dispute immediately.