Download Understanding Your Credit Report

Understanding Your Credit Report
Of all the things you can do to help ensure sound financial health, there is
probably nothing more important than maintaining good credit. But even if you
pay your bills on time and operate within an affordable budget, the electronic age
in which we live makes identity theft a growing risk. To make sure you're in good
shape and that no one else is using your personal information to obtain credit, it's
a smart idea to check your credit history at least once a year.
Three major credit-reporting agencies operate in the United States:
· Experian: (888) 397-3742
· Equifax: (800) 685-1111
· Trans Union: (800) 916-8800
Each of these agencies features slightly different information, so to obtain the
most comprehensive picture of your credit history, your creditors may subscribe
to more than one of them.
To find out what they have to say about you, order your report directly from the
agency. They'll send you a version designed for consumers — not for people
who work in the credit industry — so it will be easier for you to understand.
There's a nominal fee for each report, and one of SMCU's BALANCE
professionals can order one for you for $8.00. (BALANCE is a program designed
to help get you — and keep you — on the road to financial fitness, and offers
comprehensive educational information on maintaining good credit.)
Once you receive a copy of the report, you'll notice that it's divided into four
sections:
IDENTIFYING INFORMATION
This area features your name, and might show one or more variations of it. This
is because names are often misspelled by creditors — it's not something you
need to be concerned about. It also includes other names under which a person
may have obtained credit, such as a maiden name. Additional items are current
and previous addresses, date of birth, telephone numbers, driver's license
number, employer's name, and spouse's name.
CREDIT HISTORY
Each of your accounts — also referred to as trade lines — will be listed. In
addition to the name of the creditor and your account number, the information in
this section includes the date you opened the account and the type of credit that
was extended to you — installment, such as a mortgage or car loan, or revolving,
such as a credit card. It will also indicate whether the account is in your name
alone or with another person, and whether you are making fixed monthly
payments or paying a minimum monthly amount. Financial data includes the total
amount of your loan, your credit limit, the highest balance you've carried, and
how much you currently owe. Lastly, it shows how timely your payments have
been on the account, and lists your account status — open, inactive, closed, or
paid. It will also note any delinquent payments, so be sure to verify the accuracy
of this information.
PUBLIC RECORDS
This section of your credit report lists any financial-related data-such as
bankruptcies, tax liens, and court judgments against you — that are a matter of
public record.
INQUIRIES
This area features a list of everyone who has asked to see a copy of your credit
report. "Hard" inquiries are ones that you initiate when you fill out a credit
application, and "soft" inquiries are generated in two ways: by promotional
companies that want to pre-qualify you for an offer, and by current creditors who
are looking in on your account. Your credit scores ignore any inquiries that are
made within 30 days of obtaining a mortgage or a car loan, and two or more
"hard" inquires in the same 14-day period are counted as just one inquiry. The
bottom line here is that a large number of inquiries does not necessarily have a
negative impact on your overall score — but it may.
If you find a mistake on your credit report — such as an account that isn't yours
or an amount that you believe to be incorrect — you can dispute it by completing
the form that accompanies the report. Be patient, because creditors have up to
30 days to respond to charges of discrepancies. As long as a charge is in
dispute, the item will continue to show up on your credit report.
Now that you're more familiar with your credit report and what it says about you,
make it a priority to keep it in good standing. To assist with this task, you are
welcome to use the BALANCE program. BALANCE offers helpful information on
a variety of financial topics, and the service is free to SMCU members.