Checking your credit report regularly helps you understand where you stand when it comes to your finances. Many organizations, especially lenders, use credit reports as a way to get to know a consumer’s spending habits. They can be used to determine whether or not to approve someone for a new line of credit, a home loan, or a rental property. Although credit reports do include a significant amount of information about you, there are certain things that will not be included.
What’s On Your Report
Credit reports contain the following information:
- Identifying information, including your name, address, social security number, employment information, and birthdate.
- All credit accounts you’ve opened, such as credit cards and loans. This section includes both open and closed accounts and provides details on each account, such as the type of account, date it was opened, credit limit, account balance, and all past payments made.
- All inquiries regarding your report from the past two years. Inquiries often come from lenders checking your credit before approving you for a loan or line of credit.
- Negative information, such as late payments, car repossessions, foreclosures, defaults, tax liens, collection accounts, judgments and bankruptcies.
You can use this article to learn how to interpret each section and what to look out for.
What’s Not On Your Report
While credit reports have a majority of your financial information included, there are certain items that will not appear.
For example, credit reports list your employers but do not contain further information regarding your employment status or salary.
While information regarding lines of credit are listed, bank account balances, retirement accounts, 401k, and investment or brokerage account information is not included.
Also, your credit report will not be affected by marriage. After you’re married, your credit report and credit score remains independent of your spouse’s. Marriage will only affect your credit for accounts you and your spouse open together.
How to Obtain Your Credit Report
The three credit bureaus (Equifax, Experian, and TransUnion) are each required to provide one free credit report to consumers every 12 months. In order to obtain these reports, write a letter to the bureaus and request your report. Be sure to include two forms of identification, such as a current driver's license and utility bill, with your letter. You should receive your report within approximately two weeks.
Monitor Your Report Regularly
Credit reports are an effective way to determine if you’ve been a victim of fraud or if any mistakes have been made regarding your credit history. You should carefully review your credit file and report any suspicious listings. If you believe that you are a victim of identity theft, you should take steps by notifying the police, the credit bureaus and the creditors. If you have disputed errors and the credit bureau has not corrected your report, you can contact an attorney to discuss whether your consumer rights have been violated. Checking your report regularly is a good idea so that you can dispute errors as soon as possible.
Why It Matters
Credit reports are essentially a compilation of your credit activity. They allow lenders and other organizations to get to know you. When you learn how to read and interpret your credit reports, you will become confident to dispute any inaccuracies, and handle the errors in a timely fashion. Viewing your reports regularly, helps to eliminate any surprises when you apply for loans or other lines of credit, apply for a job, or attempt to rent an apartment.