Credit 101: Intro to Credit Reports

Published by Sphynx Financial on

What's on your report and why is it important?

A good credit history is one of the most important foundations of financial health. Over the next few weeks we’ll review the basics of credit reports, credit scores and other credit-related topics.

First thing first – have you looked at your credit report lately? This is not the same as reviewing your credit score.

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What is a Credit Report?

A credit report is the homework, tests and quizzes that result in your grade (credit score). If you’re receiving a D but were expecting an A, you have to find out which answers were incorrect (and fix them) before you can increase your grade. There may also be other errors like an incorrect name or address associated to your account, that do not affect your grade but are still important to correct.

You can receive a free copy of your credit report from each of the three major bureaus (Equifax, Experian and Trans Union) once per year at annualcreditreport.com. You can pull all three at once or space them out during the year. Because you are pulling the report yourself, this is considered a soft inquiry so it will not affect your score.

    Credit Report Sections

    Once you have your report, you will want to review the information. Every credit report is broken out into five sections:

    • Personal information
    • Personal statements
    • Public records
    • Credit history
    • Credit inquiries

    Personal Information

    This section shows your SSN, name(s), recent address(es), date of birth, and phone numbers associated with your account. The most important errors to correct are name, SSN and date of birth. You will want to contact the bureaus immediately to update.

    Phone number and address errors are not as important to correct, but may indicate potential identity theft. More on this subject in a later post.

    When applying for a mortgage, the lender may ask you to write a letter explaining any addresses that are listed within the past six months to two years to ensure you do not have an undisclosed ownership interest in another property.

    Personal Statements

    This section shows any fraud alerts you may have put on your file, any attached instructions that a lender will see regarding how to verify before opening an account, and notifies you if your file is frozen.

    Public REcords

    This section shows any bankruptcy, foreclosure, judgments or tax liens placed on your credit report. We’ll dive into more depth on this subject in a later post.

    Credit History

    This section shows your payment history, including any late payments, charge offs, current balances, credit limits, etc. More to follow on this subject in a later post.

    Credit Inquiries

    This section shows any inquiries made within the last three years, the name of the creditor who pulled your file and the date it was pulled. If you’re running your own report, you may see other soft inquiries, whereas if a creditor is pulling your report, they will only see other hard inquiries.

    Next Up

    Over the next few weeks we’ll look at the different factors in depth.

    • Addressing errors
    • Protecting your credit
    • Credit score
    • Public records
    • Payment history
    • Amounts owed
    • Length of credit history
    • Credit mix
    • New credit

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    2 Comments

    Credit report 101: How to address credit report errors · July 21, 2018 at 12:19 am

    […] that you’re familiar with the basics on how credit reports and credit scores work, it’s time to read your report. As you do, have a pen and paper handy […]

    Credit 101: Intro to Credit Scores; How your score is calculated · July 14, 2018 at 10:33 am

    […] The second part of our credit series will focus on credit score basics. By now you should have obtained a copy of your credit report and become familiar with the different sections. If not, check out the previous post in the series, “Intro to Credit Report.” […]

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