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How To Read Your Free Credit Report?

Your credit report is a complete database of financial transactions made by you during the past year. Keeping your credit report in good health is essential for your financial freedom but for that you should first access the report and know how to read it and understand it.

There are three major bureaus Equifax, Experian and TransUnion who have each been entrusted with the work of providing the consumers with a free credit report once in twelve months. You can order your copy of your free credit report via phone, certified mail or by placing an order on the central website set up by the three bureaus, AnnualCreditReport.com. However, in case you want to monitor your credit report on a monthly basis, you may buy it here.

All the three credit reports contain different information about you. Sometimes, you will find that information, which is present in one report, has been left out in the other two.

1. Personal Information – This section contains personal details about you like your name, current and past addresses, social security number and information about your employment. The free credit report given by Equifax and TransUnion begin with this section.

2. Accounts – This section is one of the most important sections and you must review it thoroughly for discrepancies. The report provided by Equifax is the longest, as it gives a detailed report of all financial transaction. A free credit report by Equifax will contain details of your Mortgage accounts, Installment and revolving accounts, Open accounts, closed accounts, standing accounts, good and bad accounts, accounts on which you have missed payments and negative and positive accounts.  The reports by Experian and TransUnion do not contain such detailed information.
   
   An Account or credit summary detailing all the accounts with account number, date of opening the account, balance, due date of payment, credit limit and the status i.e. whether the payment has been made or not is also provided at the end of this section.
3. Inquiries – These are the requests for credit checks that have been authorized by you. The section displays the name of the companies that had requested your credit file. A hard inquiry, where you had applied for a loan and authorized a credit check, will affect your credit score. Employment inquiries and promotional inquiries do not affect the credit score. If you find an unauthorized hard Inquiry in your credit report, you can ask the bureau to provide you with the name and address of the company and get it removed. This kind of Inquiry may also indicate Identity theft.

4. Collections – If you do not pay your loans as has been agreed by you, the creditor turns over your debt to a collection agency.
5. Public Records - Apart from this, the three bureaus also provide details of public records, which reflect bankruptcies, lawsuits and judgments etc., against you.
6. Statement – This space is provided in the report, where you can add your 100 word statement citing the incorrect information or the reasons why you could not make the payment on time.

All the three bureaus provide contact information at the end of the report and details as to how you can dispute erroneous information. If the bureau corrects the disputed information, you have the right to get a free credit report from it showing the corrected information.

It is essential that you access your free credit report form the three bureaus and review it thoroughly so that you can not only dispute erroneous information that may be harming your credit score, but you can also prevent identity theft and be alerted.