Reading your Credit Report Made Simple
So you’ve ordered and received a copy of your credit report, but where are the instructions on how to read it? There are codes, colors, numbers and statements that just don’t make sense and possibly an error in payment history.
Deciphering your credit report can be challenging so let’s review your credit report and turn it into a useful document you can actually understand. While credit reports from each of the credit bureaus might look different, they all contain the same information – understanding the terminology is the key.
Let’s take a look at what your report is trying to tell you:
- Creditor: This is the bank or lending institution who has loaned you the money. This includes things like credit cards, car loans, student loans – pretty much anything you can finance. In some cases, the creditor will be your gas company.
- Account Number: Account numbers on your credit report are usually partial account numbers; this is for your protection so no need to panic if the numbers aren’t an exact match. In some cases, a creditor will use a totally different number or jumble it somehow.
- Reported: This is the last time your creditor reported your account status to the credit bureaus. Sometimes they skip a month or two so don’t think they’ve forgotten about your on-time payments – or late ones.
- Last Active: This is the last time there was activity on the account; basically, the last time the creditor received a payment. You might notice the last active is the same as the last time your creditor reported the payment history.
- Opened: This is the date you opened the account.
- Limit/Highest Credit: So depending on the type of account this number may change. Let’s say you have a credit card with good payment history, over time your limit will increase. Now if it’s a car loan or mortgage, the initial amount loaned is the highest credit.
- Amount Past Due: These are late payments. We don’t like these, but sometimes life happens so do your best to pay all of your loans on time so this box displays a beautiful zero.
- Terms/Payment Amount: This box tells you the amount of the monthly payment and how many months you’ll pay until the balance is zero – we like that number. If the account is a credit card, it’s considered revolving debt and it means it’s on-going so you may not see any number in the box.
- Number of Months Revolving: This is the number of months your account has been open. Also, any late payments made on the account will be shown here under the 30, 60 or 90 days late.
Keep moving along and you’ll see any bankruptcies, foreclosures and tax liens – these are called public records. You’ll also see any name aliases, businesses that pulled your credit in the last two years and regulatory stuff.
The very end of the credit report will give you all of the contact information for every creditor listed on your credit report along with the contact information for the credit bureaus – Equifax, Experian and Transunion. If you spot any inaccuracies, contact the bureaus right away.
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