Understanding your credit report
Your credit report is a history of your credit behavior, or how responsibly you manage your money and your debt.
This history (complied by credit reporting agencies that receive your financial information from banks, lenders, and other various creditors) is used to generate your credit score. Lenders and creditors then use this report, and the credit score associated with it, to determine if they will make a new loan to you, give you a credit card, or increase your limit on existing credit cards. Your credit history also affects the interest rate you receive.
To help you become more familiar with the critical elements of your credit report, check out the four major sections of a typical credit report. Learn what’s included, why it's important to check your report, what to do in cases of inaccurate information, how to decipher your credit score, and much more.
Section A: Personal information
Sample Credit ReportSample consumer information
Name Sallie Joe
SSN 555-55-5555
Date of Birth 1/1/1975
Address 100 Tree Leaf Ln
Previous Address 200 Branch St
Current Employer TTM Financial Services
Sample consumer statements
There was a fraudulent attempt to gain credit from my Social Security number on Oct. 24, 2003. This was reported to all three bureaus on Nov. 15, 2003.
I did not make the payment to Sam’s Carpet Land on March 3, 2005 because they delivered the wrong carpet. They refused to ship me the carpet that I ordered and would not allow me to return the one that was sent, so I refused payment.
Sample public record information
Type Bankruptcy – Chapter 7
Status Filled
Date Filed 9/23/1998
Reference # 08-76-34
Closing Date 11/15/1998
Court County Court
*Liability $25,000
*Exempt Amount $1,000
*Asset Amount $12,000
Consumer information
This section consists of personal information that can include your name, Social Security number, date of birth, and current and former addresses and employer(s).
Check to ensure that your Social Security number and the rest of your personal data are correct. If not, contact each credit agency immediately. Doing this helps protect you against identity theft.
Consumer statements
The consumer statement section contains any comments submitted to the credit bureau to be included in your credit report.
Usually this statement is an explanation of why a negative credit item is appearing on your report and will be taken into consideration by creditors and lenders. Check each credit agency's website for information on how to add or remove a consumer statement.
Public record information
Public record information from local, state, and federal courts shows any legal item that may affect your credit such as bankruptcy, judgments, suits, liens, foreclosures, collection items, and items past due.
This section includes information about the type of record, whether the case is open or has been closed, the date the case was filed, a record identification number, a closing date, and which court has jurisdiction over the record.
In cases of bankruptcy, your public record will include information about liability (the amount you are legally responsible for as decided by the court), exempt amount (the amount claimed against you that you are not legally responsible for), and asset amount (the value of total personal assets that can be used to pay down your debt).
Section B: Credit score
A credit score is a grade of your credit behavior. Credit scores are frequently referred to as Beacon or FICO scores — a name derived from Fair Isaac Corporation, the company that invented credit scores.
Credit scores range from 300 to 850 — the higher the better.
FICO scoring is based on five related categories. The percentages show the "weight" each one carries.
Section C: Account history information
Sample account information summary (tradelines)
Company name VISA EXXON
Account number 555 5555 5555 5555 777 7777 7777 7777
Condition Open Open
Type Revolving Revolving
Responsibility Joint Individual
Opened 1/5/2006 2/2/2006
Limit $5,000 $1,000
Last reported 10/1/2007 10/1/2007
Reported balance $425 $0
Recent payment 10/1/2007 10/1/2007
Past due $100 N/A
30 days past due
Information regarding all credit accounts in your name
Some common account types include real estate, revolving, and installment.
Real estate accounts include home mortgage loans.
Revolving accounts have varied payments such as credit cards.
Installment accounts have a regular payment, such as student loans.
Accounts can be joint or individual. A joint account means that access and responsibility of the account are shared by two or more people. The account history will show up on the credit reports of each party. An individual account is the sole responsibility of the borrower.
What if my Account Information Summary is incorrect? If you find a mistake, get reports from all three credit agencies and look for mistakes in other versions as well. Once you have done that, you must contact the agency(s) that have the mistake.
You can generally request an investigation (which must be completed within 30 days) and rectify a dispute with each credit bureau online, by phone, or by mail. Visit the credit agencies' websites for more detailed information.
Section D: Inquiry information
Sample Inquiry Information
Name Date
Credit card company 3/3/00
Bank 3/5/01
Credit card company 4/17/03
Mortgage lender 7/23/05
Bank 2/1/06
Bank 5/10/06
Credit card company 7/13/07
Inquiries
The inquiry section lists details about each query made into your credit history, such as the name of the inquirer and the dates of inquiry. There are two kinds of inquiries:
This history (complied by credit reporting agencies that receive your financial information from banks, lenders, and other various creditors) is used to generate your credit score. Lenders and creditors then use this report, and the credit score associated with it, to determine if they will make a new loan to you, give you a credit card, or increase your limit on existing credit cards. Your credit history also affects the interest rate you receive.
To help you become more familiar with the critical elements of your credit report, check out the four major sections of a typical credit report. Learn what’s included, why it's important to check your report, what to do in cases of inaccurate information, how to decipher your credit score, and much more.
Section A: Personal information
Sample Credit ReportSample consumer information
Name Sallie Joe
SSN 555-55-5555
Date of Birth 1/1/1975
Address 100 Tree Leaf Ln
Previous Address 200 Branch St
Current Employer TTM Financial Services
Sample consumer statements
There was a fraudulent attempt to gain credit from my Social Security number on Oct. 24, 2003. This was reported to all three bureaus on Nov. 15, 2003.
I did not make the payment to Sam’s Carpet Land on March 3, 2005 because they delivered the wrong carpet. They refused to ship me the carpet that I ordered and would not allow me to return the one that was sent, so I refused payment.
Sample public record information
Type Bankruptcy – Chapter 7
Status Filled
Date Filed 9/23/1998
Reference # 08-76-34
Closing Date 11/15/1998
Court County Court
*Liability $25,000
*Exempt Amount $1,000
*Asset Amount $12,000
Consumer information
This section consists of personal information that can include your name, Social Security number, date of birth, and current and former addresses and employer(s).
Check to ensure that your Social Security number and the rest of your personal data are correct. If not, contact each credit agency immediately. Doing this helps protect you against identity theft.
Consumer statements
The consumer statement section contains any comments submitted to the credit bureau to be included in your credit report.
Usually this statement is an explanation of why a negative credit item is appearing on your report and will be taken into consideration by creditors and lenders. Check each credit agency's website for information on how to add or remove a consumer statement.
Public record information
Public record information from local, state, and federal courts shows any legal item that may affect your credit such as bankruptcy, judgments, suits, liens, foreclosures, collection items, and items past due.
This section includes information about the type of record, whether the case is open or has been closed, the date the case was filed, a record identification number, a closing date, and which court has jurisdiction over the record.
In cases of bankruptcy, your public record will include information about liability (the amount you are legally responsible for as decided by the court), exempt amount (the amount claimed against you that you are not legally responsible for), and asset amount (the value of total personal assets that can be used to pay down your debt).
Section B: Credit score
A credit score is a grade of your credit behavior. Credit scores are frequently referred to as Beacon or FICO scores — a name derived from Fair Isaac Corporation, the company that invented credit scores.
Credit scores range from 300 to 850 — the higher the better.
FICO scoring is based on five related categories. The percentages show the "weight" each one carries.
- History of payment (35%): Your payment history shows whether you pay your bills on time, the number of past-due accounts (and how long they are overdue), any accounts referred for collections, any bankruptcies, and other payment-related behavior. The better you are about making your monthly payments on time, the better your credit score will be. Late payments demonstrate higher credit risk behavior.
- Balance and available credit (30%): Not only do lenders want to know how much money you owe, they are also interested in the ratio between outstanding debt and available credit. In other words, the closer you are to "maxing out" an account, the more negative the impact on your credit score.
- Length of credit history (15%): The longer your accounts have been open and active, the more credit points you'll score. The less time your accounts have been open, the less time you've had to prove yourself. You need at least six months (preferably nine to 12 months) of credit activity to build a credit score.
- Number of accounts and types of credit held (10%): If you have many open credit accounts, you have greater potential to accrue more debt and your score may be reduced. As for types of credit held, more variety shows you have more experience with different accounts, reducing your possibility of being a credit risk. Highest scores usually involve a mix of revolving and installment accounts, showing that you know how to handle various types of credit.
- New credit (10%): How frequently and how recently have you applied for new credit? Many outside inquiries into your credit, especially within a 12-month period, can lower your credit score.
Beware: If you are lagging behind in other areas of your credit score, such as having a history of late payments, opening new accounts could imply you may be about to go into default and are looking for a way to stay afloat.
Something else to keep in mind: Too many inquiries made by lenders and creditors will be more harmful to a younger credit history than an older one.
Section C: Account history information
Sample account information summary (tradelines)
Company name VISA EXXON
Account number 555 5555 5555 5555 777 7777 7777 7777
Condition Open Open
Type Revolving Revolving
Responsibility Joint Individual
Opened 1/5/2006 2/2/2006
Limit $5,000 $1,000
Last reported 10/1/2007 10/1/2007
Reported balance $425 $0
Recent payment 10/1/2007 10/1/2007
Past due $100 N/A
30 days past due
Information regarding all credit accounts in your name
- Company name: Person/agency who gave you the credit account (i.e., bank, credit card company, etc.)
- Account number: Number that identifies your account (i.e., credit card number)
- Condition: Account status as of the last reported date (i.e., open, closed)
- Type: Type of account (common types include real estate, revolving, and installment)
- Responsibility: Who is responsible for the account (i.e., individual, joint)
- Opened: Date the account was opened
- Limit: Maximum amount of charges allowed on a credit card
- Last reported: Date the information was last reported to the credit bureau
- Reported balance: Amount owed (at time last reported)
- Recent payment: Most recent payment made on your account (at time last reported)
- Past due: Amount left unpaid after the due date of payment and number of days past due (at time last reported)
Some common account types include real estate, revolving, and installment.
Real estate accounts include home mortgage loans.
Revolving accounts have varied payments such as credit cards.
Installment accounts have a regular payment, such as student loans.
Accounts can be joint or individual. A joint account means that access and responsibility of the account are shared by two or more people. The account history will show up on the credit reports of each party. An individual account is the sole responsibility of the borrower.
What if my Account Information Summary is incorrect? If you find a mistake, get reports from all three credit agencies and look for mistakes in other versions as well. Once you have done that, you must contact the agency(s) that have the mistake.
You can generally request an investigation (which must be completed within 30 days) and rectify a dispute with each credit bureau online, by phone, or by mail. Visit the credit agencies' websites for more detailed information.
Section D: Inquiry information
Sample Inquiry Information
Name Date
Credit card company 3/3/00
Bank 3/5/01
Credit card company 4/17/03
Mortgage lender 7/23/05
Bank 2/1/06
Bank 5/10/06
Credit card company 7/13/07
Inquiries
The inquiry section lists details about each query made into your credit history, such as the name of the inquirer and the dates of inquiry. There are two kinds of inquiries:
- Hard inquiries are made by lenders and creditors when you have filled out a new loan or credit application. They can count against your credit score if too many are made within a short time. Remember, 10% of your credit score is affected by new inquiries.
- Soft inquiries are made when you request a copy of your credit report or when your credit is checked for marketing purposes, such as when a credit card company sends you a “pre-approved” application.