Understanding Your Credit Report

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You need to understand your credit report.  Each of the three Consumer Reporting Agencies maintains its own database.  Often the information on each of these reports is different from the other’s and you need to get all three to ensure you are covering all bases.

Here's how to get your report:

If you have not ordered a free credit report in the past 12 months, the quickest and easiest way to get all three copies is to visit www.annualcreditreport.com .  This service allows you access to all three Credit Reporting Agencies and allows you to download each of their reports.  If you are married, it would be a good idea to have your spouse download their report immediately after you log out from the site.

If you have been denied credit, insurance or employment, you will receive a "notice of adverse action" from the Consumer Reporting Agency (CRA) that provided the information.  You have a right to see what information was provided that led to this adverse action and your notice will have instructions on how to receive your free copy.  Remember that this is only the CRA that is reporting the information.  It may be wise to get copies from the other two as well to compare info and see if there is an opportunity to dispute.

You can always visit the CRA’s website and request a report directly from them.  There will be a fee involved obviously, because selling your information is their business.  Don’t you just love it.  You give them the content for free and they sell it to others.

Once you have your reports, the challenge is trying to figure out how to read them.  You may want to go to our Glossary of Credit Acronyms and print the page so you have it handy when analyzing your credit report.

Basically the reports are divided into four sections

Personal Information
This section will have your name(s), addresses, employer, date of birth, social security number and your spouse’s name if married.  Make sure all the information is correct and belongs to you.  The first thing to attack here are old addresses as they serve no purpose to a creditor.  You may see variations of your name.  Obviously you only have one spelling and the others should be removed.  This can usually be removed with a call or a letter to the CRA.  

Public Records
This section deals with anything that is a public court record, such as bankruptcies, liens, judgments and felony convictions.  Our court systems are not exactly the vision of efficiency and documents will pass through many hands before becoming the public record.  Review these carefully to insure accuracy.  If you find an error, send a certified letter to the CRA requesting it’s removal or correction.  Be careful not to send supporting documentation as it may be used to counter your request.  If the CRA needs documentation let them ask for it specifically.

Credit history
This is the nitty-gritty of your history.  Loans, credit cards, mortgages, leases and collection accounts will appear here along with your payment history for each.  An important item to look for here is the date of last activity.  Generally speaking, the information on these reports has a Statute of Limitation (SOL) of seven years.  Exceptions to this are bankruptcies which will remain for 10 years.  A negative item will fall off the report after seven years since the last date of activity.  Positive items may last forever but no less than 10 years.