Many of life’s most important transactions are cloaked in complicated language. From health insurance to home loans, many people either ignore the bits they don’t understand, or just pretend like they ‘get it’ and move on. In the case of your credit report, understanding the complicated parts can actually help you get a better sense of your financial standing. Here’s how:
Get All Three Reports for Free
Each credit bureau — Equifax, Experian, and TransUnion — actually has a slightly different way of calculating your credit report. For example, a card you opened last year might show up on one and not the others, or a mistake can show up on one but not the others. So for a comprehensive look at your creditworthiness, get all three — after all, they’re all free to access.
Once per year, you can use the government-approved site AnnualCreditReport.com to pull your three reports. If you just want to keep tabs, some people stagger them throughout the year.
Break Down Each Section
Personal info: This includes your name, past addresses and maybe a job you’ve had recently. If you see an address you’ve never lived at, or a name that doesn’t belong to you, that’s a problem.
Accounts: Every account lists whether it’s open or closed, your balance and your payment history. Most of it should look familiar. If something feels off — like a missed payment you know you didn’t miss — flag it.
Inquiries: These are the entities who’ve been checking your credit. Soft inquiries don’t impact your score, but hard checks do. These “hard pulls” or “checks” should only appear when you apply for a line of credit. Write down any pulls you don’t recognize.
Public records: Not everyone has this section listed in their report. But if you’ve filed bankruptcy, it’ll be here. If you haven’t and something still shows up, that’s a red flag.
For a simple look at what belongs in each section, Equifax has a good guide.
Spot Red Flags
Errors on credit reports can be more common than you’d imagine. Especially if you have an upcoming need for a high credit score, taking a hard look at your credit report can be a worthwhile exercise.
The biggest things to look for include:
- Accounts you don’t recognize
- Payments marked late when you know they weren’t
- Debts that should’ve dropped after seven years
- Personal details that don’t belong to you
If you notice accounts you never opened or inquiries you never made, don’t ignore it — that can be a sign of identity theft. Head to IdentityTheft.gov for help creating a recovery plan, should you find yourself a victim of identity theft.
Fix Errors on Your Credit Report
Disputes sound complicated, but they can be fairly straightforward. Note the provider of the report with the error, then go to their website. Each credit report provider has an online form to report errors, which usually requires some proof of error.
As always, keep copies of everything and mark the date you submitted. By law, the bureau has about 30 days to investigate. You’ll receive a written response back, and the bureau will update your report if they agree that there was an error.
Move Forward With Your New Understanding
Your credit report decides a lot more than you think — loan approvals, credit card limits and sometimes even job opportunities. But even if everything looks correct now, it’s worth keeping an eye on. If you wait until you’re denied for a loan, you’ll wish you caught it sooner.
But sometimes the issue isn’t a mistake, it’s the reality that the report shows. If you’ve found yourself with too many accounts, high balances or late payments stacking up, it’s time to take action. And Accredited Debt Relief may be able to help: Our debt consolidation program can help you save significantly on monthly debt payments and even become debt-free faster than you could by making minimum payments.