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Your credit report is one of the most important documents you have. It contains information about your credit history and demonstrates to lenders whether or not you are a responsible borrower. This information can affect your ability to get a loan, a job, or even an apartment. If you don't understand your credit report, it can be hard to fix any mistakes that are on it. In this blog post, we will explain how to read and understand your credit report. We will also show you how to dispute any errors that might be on it. Let's get started!
Once you request a copy of your credit report, you’re going to see that it’s made up of four different sections: personal information, potentially negative items, accounts in good standing, and inquiries. Let’s go over each section one by one.
Starting with personal information, this is where you’ll find your name, address, previous address, Social Security number, date of birth, phone number, and employment history. Is all of this information accurate? Make sure to pay special attention to the spelling of your name and if there are other variations of your name. This is important because if there’s an error in the spelling of your name, it could result in your file being mixed with someone else’s. The same applies for the addresses listed. Make sure they are all addresses that you recognize.
Next you’ll see the potentially negative items including late payments, charge-offs, collections and public records. These items are generally going to have the biggest impact on your credit score. So a few things to keep in mind when looking at this section: Are the late payments accurate? Were you actually 30, 60, or 90 days late? Is the charge-off paid but still showing a balance? Is the bankruptcy reporting correctly? Was the collection paid but the balance is still showing? Did you receive any written confirmation from a creditor or collector agreeing to remove the account from your report once paid, and after paying it, it still shows?
The next section is the accounts in good standing and will show your revolving accounts like credit cards, as well as your installment loans, like your auto loan or mortgage. You want to make sure that all of these accounts are reporting correctly. Are all of these accounts yours? Is the status of each account correct, meaning whether they are open or closed? Were all payments made on time or did you miss payments? Did you pay the account for less than the amount due? Are you accurately listed as an authorized user, co-signer, or joint owner? Are the accounts that you closed listed as “closed by consumer” or “closed by creditor”? And finally, is the credit limit or loan amount reported correctly?
The last section is inquiries and will show who has pulled your credit report within the last two years. You want to make sure that all of the inquiries are yours and not fraudulent. You also want to make sure that they are accurate as to the type of inquiry. For example, was it a hard pull or a soft pull? A hard pull generally happens when you apply for credit, like a credit card or loan, and will stay on your report for two years. A soft pull generally happens when you check your own credit score or a company checks your credit for marketing purposes.
Now that you understand each section of your credit report, it’s time to take action. If you notice any errors, you’ll want to dispute them with the credit bureau. You can do this by sending a letter to the credit bureau detailing each error and why you believe it’s incorrect. You should also include any supporting documentation that you have to back up your claims.
If you need any help with this process, please reach out to us and we’d be more than happy to assist you and give you more information about our credit repair program. You can email your questions to firstname.lastname@example.org or schedule a free credit consultation here.