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How to Read a Credit Report

By: EconomyWatch Date: 25 August 2009

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A credit report is basically divided into four sections:

Personal information
Credit history
Public records
Inquiries

How To Read A Credit Report: Personal Information

The personal information section contains basic information that identifies you. It displays

Your name, listed along with any other names you may use
Date of birth
Telephone numbers
Driver's license numbers
Your spouse's name
Your current address and previous address
Employer information is detailed, including the full address and the date that this information was reported to the credit reporting agencies.

While none of this information is included in your credit score calculation, it is often used to verify your identity or to confirm the accuracy of the information you provided for an application. Ensure that all the information is accurate, as anomalies might creep in due to wrongly spelt names or more than one Social Security Number (SSN).

How to Read a Credit Report: Credit History Section

This section provides information on all the credit accounts open in your name. These accounts are divided into the following categories:

Real estate: Includes first and second mortgage loans
Installment: Lists fixed-term accounts with regular payments, such as a car loan
Revolving: Includes accounts with varying payments, such as a department store card
Collection: Includes accounts that are past their due payment date and have been assigned to an attorney or collection agency
Other: Includes accounts that do not fit in any of the above categories

The entry for each account includes:

The name of the creditor
The account number
Date of opening the account
The kind of credit
Whether the account is only on your name or joined with another person
Total loan amount or high credit limit
Amount owed
Fixed or minimum monthly payments
Status of the account (whether it is open, inactive, closed or paid)
Your payment history

How to Read a Credit Report: Public Records

The Public Records section lists information about legal matters that could jeopardize your credit, such as:

Bankruptcies
Foreclosures
Adverse judgments against you in civil actions
State or federal tax liens

How to Read a Credit Report: Inquiries

The inquiry section of your credit report lists businesses that have verified your credit over the past couple of years, the date of inquiry and the CRA that processed the request.

Inquiries are divided into two sections:

"Hard" inquiries are those that are initiated by creditors and lenders for reviewing your credit data for the purpose of approving or rejecting an application
"Soft" inquiries are initiated by companies that want to send out promotional information to a pre-qualified group or current creditors who are monitoring your account.