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Credit reports contain information gleaned from banks, credit unions, finance companies, mortgage companies, student-loan providers, auto dealers, utility companies, public records and other sources. When incorrect information shows up, it can cause you to pay more for credit; it can hurt your ability to get insurance, a job or a place to live; or it can be a sign that you have been the victim of identity theft. It is a good idea to periodically review your credit reports, but understanding the report can be a challenge.
Getting Started
The federal Fair Credit Reporting Act guarantees you the right to see your credit report once a year--more often if you have been denied credit, a job, or a place to live based on information in your credit report. To get a copy of your credit report, log onto annualcreditreport.com and order your report from all three major credit reporting companies--Equifax, Experian and TransUnion.
Major Sections
The major sections of a credit report include identifying information, account history, collection accounts, public records and inquiries. Read each section carefully, checking for any errors or accounts that do not belong to you.
Credit History
The credit history section will show each account, the company name and account number, account ownership, date opened, months reviewed, last activity, highest amount charged or credit limit, terms of the loan, balance, past-due amounts, payment status, and the date the most recent information was reported. Abbreviations used vary among credit reporting companies, but common ones for account ownership include I-individual, U-undesignated, J-joint, A-authorized user, M-maker, T-terminated, C-co-maker or co-signer and S-shared. Numbers 0-9 are used to show timeliness of payment, with current payments usually shown as 0 or 1 and larger numbers showing past-due payments.
Collection Accounts
Accounts sent to collection agencies remain on your credit history for seven years. An account can show up with an unfamiliar company name if the debt was sold by the original creditor. You can dispute any debt that does not belong to you by sending a dispute letter to the credit reporting agency.
Public Records
Public records on your credit report can include tax liens, bankruptcies filed, court judgments, delinquent child support and collection records. Bankruptcies remain for 10 years, the other records for seven years.
Inquiries
Your credit report will show you every instance in which someone has reviewed your credit report, and the reason for the review. Applications for credit are "hard" inquiries and are factored into your overall credit score--too many can lower your score.
Source:
TransUnion: Credit Reports and Scoring
Illinois Attorney General: Every Cent Counts
Consumer Credit Counseling Service of Orange County
More Information:
FTC: Building a Better Credit Report
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