How to Read a Credit Report

how to read a credit report

How to Read a Credit Report

How to Read a Credit Report

Understanding how to read a credit report is key to understanding your credit score. By reviewing your credit reports, you’ll be able to get a clearer picture of your overall credit health, and you’ll know if you need to make any changes to your credit habits. 

At Pivotal Wealth, we help our clients become financially literate and eliminate debt so they can build their wealth. Understanding your personal credit score and how to read a credit report will help you manage and improve your credit.

Getting a Copy of Your Credit Report

First you’ll need to obtain a copy of your credit report. You can order one free copy of your credit report once a year from each of the three main credit reporting bureaus–Experian, Equifax, and TransUnion. Your credit report shows the same information that lenders use to determine your creditworthiness, the interest rate they will offer you, and more.

How to Read Your Credit Report

Your credit report will have several different sections, and it’s important to check each one for discrepancies or inaccurate information. If you find any errors, you can file a dispute or file an update with the bureau to change the information listed. 

The components of a credit report include:

Personal Information

The personal information section of your credit report will consist of your name, social security number, date of birth, address, and telephone number. 

Employer History

Your employer history information may also be included in the personal information section, depending on the reporting bureau. It can include employer history going back 10 years, which helps lenders and creditors verify your identity. You may file a dispute with the reporting bureau to change any outdated employer information or add missing information. 

Consumer Statements

The consumer statements section of your credit report contains any statements you may have submitted to a credit bureau. 

Account Information

This section includes details on all of your accounts, including 

  • Student loans
  • Car loans
  • Mortgages (rental payments typically will not show up on your credit report)
  • Lines of credit
  • Types of credit accounts you have

 

Your credit report can also include: 

  • Open accounts
  • Closed accounts
  • Dates that accounts were opened or closed
  • Credit utilization
  • Credit account balances
  • Loan payment status 
  • Payment history

Public Records

The public records section of your credit report can include tax liens, foreclosures, bankruptcies, and civil judgments against you. All of these things can hurt your credit score.

Credit Inquiries

Hard credit inquiries can negatively impact your credit score, but you should also pay close attention to this section of your credit report in order to prevent any possible fraud or identity theft. Hard credit inquiries typically happen when your credit is checked by a financial institution after you apply for credit. If you notice any unauthorized hard inquiries, it could be identity theft.

Potential Credit Report Errors

  • Accounts that belong to someone else with the same name
  • Accounts created using identity theft
  • Incorrect credit limit or credit balance information
  • Incorrect payment history

Financial Literacy and Debt Elimination

Pivotal Wealth helps ordinary people become financially literate and debt-free. If you are struggling to understand your credit report, or if you are concerned about your credit score, we can help! Give us a call today to learn more about how to read your credit report and improve your credit score.

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Matt Lovelady is a co-founder and managing vice president of Pivotal Wealth. He has launched multiple businesses in the financial services space and is passionate about helping people become debt-free, build their wealth, and plan effectively for their retirement.