Understanding how to read a credit can be important when it comes time to review a credit report that may have been ordered as a free credit report or when credit report is ordered through a credit reporting agency to review the report and credit score or when someone may have to discuss the contents of their credit report with a creditor.
How the information is displayed in a credit report will be different depending which credit reporting agency produced the report. However, the information is generally organized in the same manner from each of the three big credit reporting agencies.
All credit reports for consumers begin with the identifying information for the individual that the report covers. The credit report will identity the individual’s name, current address as well as known recent home addresses, the individuals social security number, date of birth or age, the report number, and the date the report was issued.
If you need to contact any of the credit reporting agencies in reference to information on your report, to initiate a dispute about the contents of the credit report, for example you will need to provide the report number included on your credit report.
The report will sometimes include a report summary near the top of the report. This includes a short summary of the potentially negative and positive pieces of information found within the report.
The main part of the credit report will list all of your accounts; current accounts, paid accounts and collection accounts. Each account or item listed on your credit report is called a trade line. For each trade line, there will be detailed information on your credit about that account.
Account information will usually include the following:
The creditors name; this will be the name of the creditor or collection agency that has reported the information to the credit reporting agency such as a mortgage company you have your home loan with, credit card company, car loan and similar creditors.
The date the account was first opened.
The original loan amount or total credit limit. This is the amount of the original loan when it was opened for loans such as mortgages or car loans or the credit limit will be listed here if the accounts related to a credit card or charge card.
The most recent balance owed on the account. This is the account balance of the date reported to the credit reporting agency.
The scheduled monthly payment. Depending on the type of account, the monthly payment will either be a fixed amount such as the payments found on installment loans or the minimum payment that may correspond to a revolving debt such as a credit card.
The high balance for this account. This is the highest balance the consumer has put on the account if it’s a mortgage or car loan, for example, the original loan amount will be listed. For charge cards, the highest balance put on the card to date will be listed.
The most recent recorded payment date.
The account history. This will often include how the account was paid over time on a month by month basis. Some credit reporting agencies will simply list the number of months reported and the number of times the account was 30 days past due, 60 days past due, 90 days past due or more.
The accounts current status. This describes the current status of the account. It might read, open or current, paid as agreed, collection account, paid, closed account, account closed at consumers request, paid in settlement, placed for collect ion, closed, or some variation that describes whether or not the account is active and in good standing.
The account number or partial account number will be included. For security purposes, some creditors list only the first or last few digits of an account number.
The type of account will also be included, indicating whether the account is an individual account or joint account and whether the account is a revolving account with a fluctuating balance and payment or an installment loan account or a collection account.
After the main body of the report with the listed account, both open and closed, there will be a list of recent credit report inquiries. This will include a list of companies that have requested a copy of your credit report, usually over a 24 month period of time.
The next section includes public records information. This information is usually accessed from local, state and federal court records. Items that may be included are creditors judgments entered against the individual, bankruptcy filings or tax liens.