How to Order, Read and Understand Your Credit Report

What information is included in your credit report?

Your credit report contains a ton of information about your financial past.

I’m talking about your current and past debt balances, how often you’ve missed payments, where you’ve applied for credit, information on bankruptcies and tax liens, how far behind you are on child support, your previous addressees, previous employers and more.

Phew. That’s a lot!

Since all of that information is contained in your credit report, you can understand why it’s so important to review it on a regular basis.

If it’s been awhile since you checked yours (12 Months +), keep reading and I will show you how to order, read and understand what’s in your credit report.

How to Order Your Credit Report For Free

Free Due to Federal Law

Thanks to the Fair Credit Reporting Act (FCRA), you are able to receive a free credit report from each of the 3 credit reporting bureaus (Equifax, Experian and TransUnion) every 12 months.

The only place to obtain your free reports is this official site run by all three credit bureaus. In other words, don’t fall for those gimmicky commercials where they say you can get your free credit report. In order to do that, they make you sign up for a monthly service that costs money. Bad idea!

You can also call 1-877-322-8228 to order it by mail.

When completing the request, be prepared to answer a few questions about your credit history.

Personally, I get questions like “at what bank did you open up a mortgage?” and “which one of these streets did you live on?”. They are pretty basic but if you don’t know the answer to one, it may stop you from receiving your report.

If you’ve already used all of your allotted FCRA credit reports, there may be additional ways to receive your report for free.

Free Due to State Law

Some states allow their residents to receive another free report from each credit bureau. This is in addition to the three that you can receive from the FCRA. If your state isn’t on the free list, they may offer a discount which may be helpful.

For most states, in order to use this benefit, you need to contact each credit bureau directly. The annual credit report website above will not work. Here are the phone numbers for each credit bureau:

  • Equifax – 1-800-685-1111
  • Experian – 1-888-397-3742
  • TransUnion – 1-800-916-8800

Additional Ways to Get a Free Credit Report

Here are some other ways to get your report for free:

  • You’ve been denied credit, insurance or employment and you request your report within 60 days
  • You’re unemployed and plan on looking for work within 60 days
  • You’re on welfare
  • Your credit report is inaccurate due to fraud or identity theft

For these instances, contact the credit bureaus directly.

How to Read and Understand Your Credit Report

Now that you have your hands on your credit report, it’s time to figure out how to read and ultimately understand it.

Here is a list a things you’re going to find:

Personal Information

Your credit file will have various types of personal information contained in it. You can expect to find the following:

  • Your social security number (it may only show the last 4 digits)
  • Your date of birth
  • Your current address
  • Your previous addresses
  • Your current and previous employers (not always)

If you see any errors, be sure to contact the credit bureau to get it corrected.

Your credit report will NOT contain any of the following:

  • Your salary
  • Your bank account balances
  • Your debts interest rate
  • Your credit counseling history
  • Your child support payments (unless you are delinquent)
  • Your race, religion, sex, marital status, etc.

Credit Summary

Some of the credit bureaus will provide you with a credit summary. It’ll show the total number of open accounts, total current balances, total available credit and monthly payment amounts. It’s just a quick snapshot to wet your appetite.

Types of Credit Accounts

Typically, your credit report will list each of your accounts in one of four categories. They are as follows:

Mortgage Accounts

This is where you’ll find your first mortgage and any other loans that are secured by real estate.

Installment Accounts

These are credit accounts that have a predetermined payment and payoff date. This is where you would find your car loan, student loans, personal loans, etc.

Revolving Accounts

This is where you’ll find anything that has a credit limit and requires a minimum payment each month. Your credit cards will be the most likely items here.

Other Accounts

Very few people will have accounts listed in this category. It includes charge cards that must be paid in full each month and cannot carry a balance forward.

Information Reported For Each Account

Each account listed will have a number of different items reported on it. This is the bread and butter of your report.

As you are going through these items, you’ll want to make sure each and every one is correct. If it’s not, you’ll need to take steps to get it corrected. 

Creditor Name and Account Number

This is where you’ll find the name of the creditor and the associated account number.

Account Owner

Listed here you’ll see the ownership of the account (i.e. how you are associated with it). It could be one of these:

  • Individual
  • Joint
  • Authorized User
  • Co-Signer

Term Duration

If the account is being paid on installment (car loan, etc.), this is where you find it’s duration. It’s typically listed in months.

Term Frequency

This defines how often you are required to make a payment. This is typically monthly.

Type of Loan

This defines the type of loan that you have. It could say auto, education, mortgage, credit card, charge card, etc.

Credit Limit

If your account has a credit limit, it will be listed here. Sometimes this limit may be less than your account balance if the creditor has decided to reduce it.

High Credit

This is the highest that your account balance has been since the account has been open.

Balance

This is the most recent balance reported on your account. Balances are typically reported at a certain time during the month depending on the creditor. It is NOT the high balance on your account during that given month. In other words, if you charge $400 on your credit card and pay if off the next day, your reported balance may be $0. It will be as if you didn’t even use your account.

Amount Past Due

If you neglect to make a payment by the required due date and it is still outstanding as of the date the account was reported to the creditor, an amount will be listed here.

Scheduled Payment Amount

This is typically your minimum amount due on the account. It may be a billing cycle or two behind.

Actual Payment Amount

This is the most recent payment that has posted to your account. It may be a billing cycle or two behind.

Payment History

This section usually contains some type of chart or calendar. Each month will list if the account is current, 30, 60 or 90+ days past due.

Months Reviewed

This is the total number of months that the creditor has reported information on your account. Even if the account is closed, a creditor could still report information.

Date Opened

This is when you opened the account.

Date of Last Activity

This is the last time that you either added to the debt or made a payment.

Date Reported

This the most recent date that the creditor reported information regarding the account. If the account is closed, this could be a date several years ago as closed accounts can stay on your report for up to 7 years.

Date of Last Payment

This is the last time that you paid on the account.

Date of 1st Delinquency 

If you’ve had trouble paying your bill on time in the past, this is the date when the first issue happened.

Date of 1st Major Delinquency

If you do not pay your bill for 60+ days, a entry will be made here.

Charge Off Amount

If the creditor believes that they will not be able to collect a debt from you, they may charge off your account. In other words, they will more than likely send your debt to a collection agency.

Date Closed

If you or the creditor decide to close your account to new activity, you’ll find a date here. There’s usually something in the comments section that lists who closed the account and for what reason.

Negative Accounts

If any of your accounts are past due or in collections, they will be listed in this section. These are the accounts that you must thoroughly review for inaccurate information as they hurt your credit score.

Collection Accounts

If a creditor no longer feels that they can get you to pay your account, they may sell your debt to a collection agency.

A collection agency will then attempt to collect the past due amount directly from you. They have been known to go to extreme lengths to get you to pay. You should know your rights in those situations.

Public Records 

This section contains information on bankruptcies, liens or judgments and comes from federal, state or county court records.

Credit Report Inquiries

When someone requests to view your credit report, it is logged and listed as an inquiry. There are two types of inquires: hard inquiries and soft inquiries.

Hard Inquiries

Hard inquiries are ones that you give authorization for.

When you’re applying for a loan, the creditor typically asks to view your credit report. When you authorize the request, this will count as a hard inquiry. Hard inquires may affect your credit score and are able to be viewed by prospective lenders.

Soft Inquiries

Soft inquiries are all credit inquiries where your credit is NOT being reviewed by a prospective lender. They could include:

  • Periodic reviews of your credit history by one of your current creditors
  • Employment inquiries
  • Checking your own credit report
  • Promotional inquiries

*     *     *     *     *

That’s a lot of information but it’s necessary for you to understand it. Your credit report is utilized in a lot of different ways and consistently reviewing the information for errors can save you a ton of money over your financial lifetime.

Did you find any surprises on your credit report?

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