It’s important to understand what types of information your credit report contains and how to read them. That’s because these items directly contribute to your credit score. And when you have good credit, it’s easy to qualify for financing when you need it, whether it’s a new car loan, a mortgage, or a credit card.
If you have bad credit, understanding your credit report helps you to identify the problem areas and work on improving them. As the negative items on your report are replaced with positive ones, you’ll notice your credit score begin to increase.
Three credit bureaus, Equifax, Experian, and TransUnion, are the largest and most trusted in the nation and the majority of lenders use at least one if not all of them to check your credit history. While each credit bureau’s report may have subtle differences, the majority of the information on each report is similar.
Each bureau’s credit report structure has several key categories of information that are deemed either positive, negative, or neutral. These categories include your account summary information, account history, credit inquiries, public records, and consumer statement. Let’s take a look at each one so you know how to read the information, and more importantly, how to use it to your benefit.
How Can You Access Your Credit Report?
Before you begin to understand your credit report, you first have to get it. The quickest and easiest way is to visit AnnualCreditReport.com. It’s the only website that is run by the three main credit bureaus.
Federal law mandates that you may access your credit report for free one time every 12 months, and this is the place to do just that. Start off by entering some basic information about yourself. You’ll then have to go through a separate identity verification process for each credit bureau.
If you’d like, you can begin by requesting just one or two reports and saving the others for later. This could be helpful if you want to track how the information on your report is changing over time. But if you’re about to apply for a large loan, you might want to check all three at once to make sure your information is accurate and up to date.
Another consideration when you’re about to apply for new credit is the length of dispute time. When you get your report for free, the credit bureaus can take up to 45 days for an investigation. If you’re in a hurry, considering purchasing your credit reports because then they only have 30 days to respond to a disputed item.
Once you decide which reports you want to request, you’ll be asked a series of personal questions only you should know the answer to. This might include confirming previous legal names and addresses, or answering financial questions, such as what credit cards you have or when a particular account was opened. From there you can download your report and view it immediately.
If for some reason you don’t answer the questions correctly, you have the option to print out a form and request a copy of your credit report via regular mail. You can also use this option if you simply prefer paper copies over digital copies.
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