Do you know how to read credit report? Being able to know
how to read your report is very significant if you are at all worried about
credit rating and where it is going and how it is affecting you.
Credit reports are much easier to read now than in the past,
because years of pressure from consumer advocates and regulators led to
significant changes in the credit reporting industry.
Fair and Accurate Credit Transactions Act
The rise of identity theft was a key consideration for
lawmakers when Congress wrote the Fair and Accurate Credit Transactions Act of
2003, which amends the Fair Credit Reporting Act.
During that procedure,
consumer advocates and others called attention to the growing importance of
consumers understanding how the credit system works.
These days, bad marks on your credit report can determine
whether you land the job you're applying for, how much you pay for auto and
homeowners insurance, and your credit card interest rate, plus whether you have
to pay your utility or cell phone company a deposit.
But, despite tougher laws, including free reports for
consumers, centralized fraud reporting, and more pressure on creditors to
respond to consumers' complaints, the credit-reporting industry is still, to a
large degree, a black box, and credit reports are not nearly as clear and
understandable as they could be. Consumers still get confused.
Sections Of Credit Report
Included in how to read your report are four different
sections that all reports should have. These include identifying information,
credit history, public records and inquiries.
Of course the identifying information is what is what
identifies you and is unique to you and should always be correct. Social
security numbers are usually the main identifying factor, because it is unique
to each person.
Identifying information also includes you driver's license
number, address and telephone number as well. Another part of your report is
the history of your credit.
This includes different accounts that you have held
and if there are any balances left and what they are. These are very important
and must be verified by account numbers.
Public records are the part that will contain anything
regarding criminal records of any kind if you have any. Of course one more part
that you should know how to read is the inquiries part of the report. This part
will list anyone who has looked at your report and how many times they have,
including yourself.
You should focus on identifying what's bad on your reports
and the information you'll need for planning your repair effort. There are many
different styles and formats of credit report, but most of them derive from one
of the three super-bureaus that supplied the information being reported.
Each of the three main credit bureaus uses a different
format, plus each bureau's format varies depending on whether you request the
report online or order it by phone or mail.
Basic Information Required for Repairing Bad Credit
On top of that, regional credit bureaus, from which mortgage
lenders and others often buy reports, use their own unique format to list your
credit information. The instructions are organized around identifying the basic
information you need for repairing bad credit:
- Credit
name (and type of creditor)
- Account
number
- Status
- Lateness
patterns
Some of the information, such as your name and address,
won't be new to you, but it's useful to know what the credit bureau has listed
anyway. Tiny mistakes in any of the most mundane information can affect your
credit rating, particularly if it means you've been confused with someone else
with a similar name.
Also, each credit bureau offers information on its web site
on how to read credit reports and how to submit a dispute, and also will mail
you that information if you request your report by mail.
When communicating with the credit bureaus, be sure to
include the credit report number at the top of your report. Experian calls it
the "report number," TransUnion says "file number," and
Equifax refers to it as a "confirmation number."
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