Credit Facts

Anyone that has a credit card or any type of loan, also has a credit report. Most Americans are aware of this fact, they just dont' have the ability to understand or access their credit report. The Fair and Accurate Credit Transactions Act, signed into law on Dec. 4, 2003, a bill that gives every American the right to a free copy of their credit report every year from each of the three major credit bureaus. These are Equifax, Experian and TransUnion.

Most credit reports will follow a basic format. If you didn't get a copy of your credit report directly from one of the bureaus mentioned above, your best option for a translation is the source that's providing your copy. There is a four part outline most bureaus use in writing your credit report. The first part is your identification information. This information would include your name, social security number, current address, previous addresses, date of birth, driver's license number, telephone number, spouse's name, your employer's name and length of employment with the company. When reading your credit report, make sure all of your identification information is absolutely correct. You might be surprised at the mistakes that can be made.

Your credit history is the next part of your credit report. This will be the majority of your credit report, especially if you have department store accounts, multiple credit cards, multiple bank and other financial institution loans, mortgages, car loans, lines of credit, home equity loans and other transactions involving credit. It can also be quite extensive if you've had credit for a long time. The credit bureau will refer to these accounts as trade lines.

The information listed on these accounts (trade lines) begin with when you initially opened the account, then follow with the type or kind of credit (installment, car loan, personal loan, etc.) and whether it is in your name solely or whether your sharing the account with someone. The total amount of the balance due on your loan or charge account is included along with your credit limit (how much you can spend on the account). The Credit Report will also show how much you still owe and if the payments are fixed or minimum monthly amounts. Your status, open/inactive/closed/paid, follow your payments. The most influencial part of your credit report follows next, were you on time with your payments? This is where the bureaus list if you were late with payments, and if late, how late and how often you've been late. If you are not late, it will show you pay on time.

The third part of your credit report is called Public Inquiries or Public Records. This section lists tax liens, judgments, foreclosures and bankruptcies. It is definately to your benefit to have this part bland want this part to be blank. If you see anything listed in this section, attempt to correct it immediately.

The fourth part of your credit report is the Inquiries section. It is divided into two parts. Part one lists the inquiries you initiate by filling out a credit application. This section is generally referred to as the hard inquiry section because you are the initiator of the inquiries. The second part is called the soft inquiry section. Here you'll find the names of companies who have sent you offers of credit or current creditors who are monitoring your account.

Sometimes, your credit report will have a fifth section called Remarks. This is a section where a creditor might make a specific remark about you. Hopefully, something nice. Your credit report will have an explanation of terms on the backside of the report. Here is where they explain what the numbers and letters you see next to your accounts mean and how good or poor your credit report actually is. It's really quite simple to read your credit report, once you understand the basics.