The Anatomy of Your Credit Report: What You Need to Know
Everyone can agree that when you own a car, it’s important to know what’s going on under the hood, right? As a credit card holder, you should feel the same way when it comes your credit report. However, if you’re unfamiliar with reading a credit report, it can be confusing. If you find your credit report confusing, it might seem easier to just ignore it. But, that’s not a good practice. Instead, learn how to decode your report. Becoming familiar with your report can help you to catch identity theft or fraud, monitor your score for any big changes, and stay on top of the restoration of your financial health.
What is your credit report
It is a detailed report of your credit history. Credit bureaus collect this information, then create your credit report based on that information. Your credit report is one item a lender looks at to determine if they will approve your loan application.
What’s in your credit report
This section is self-explanatory, but still important to review for accuracy. This section will include your name, address, Social Security number, birth date and employment information.
This section reviews your credit accounts. Your lenders generate a report of each account you have with them. The report contains the date you opened the account, the type of account (credit card, student loan, mortgage, etc.), your credit limit or loan amount, the account balance and your payment history.
This section contains a list of everyone who accessed your report in the past two years. This can happen when you open a new bank account or apply for a loan. There are two types of inquiries- voluntary inquiries and involuntary inquiries. A voluntary inquiry happens when you’re requesting credit, while an involuntary inquiry occurs when lenders request to review your report.
Public records and collections
This section contains information about any legal issues you may be involved in. These records can include bankruptcies, liens, judgments or wage garnishments.
Now that you know what to look for, try taking a look at your report. You can use AnnualCreditReport.com to see a free report of your credit every 12 months. You can also use websites like Credit Karma to closely monitor your credit score.