You already know that you should be looking at your credit report at least once a year. Understanding what this report says can actually be difficult. There are lots of different terms to contend with and numbers that you need to worry about. What do you really need to know in order to understand your credit report? Here’s a quick guide to get you started:
- There are actually three credit-reporting agencies in the United States. These agencies are Equifax, Experian, and Transunion. Each year, you can get a free report from each of these agencies, as provided by federal law. There are a wide variety of websites that grant you access to this credit report, some of which are free, some of which appear to be free but do actually charge you.
- Do look at all three of your reports. Don’t just read one of your reports and hope that the other two have the same exact information. Some information might actually be reported to only one or two of the agencies. A mistake might be on one of the reports but not on the others. Don’t order them all at once—order one every four months and compare the reports.
- Your report has four sections. Once you are looking at it, you will see that it has four sections. The first is your identifying information. Make sure that all of this information is correct. Then you will have your credit history, which will show you what kind of credit you have, how much you have, how much you owe, etc. Public records come next, which might include judgements or bankruptcies. Lastly, there will be a list of people who have inquired to look at your credit.
- Check for mistakes. The biggest reason to get your credit report is to check for mistakes. Much of the information on it is reported by humans, which means there is a possibility that it could be reported incorrectly. Your report will have a link to a form where you can submit a dispute, which prompts the agency to take a closer look at that item and correct any errors. You can escalate a dispute to the Consumer Financial Protection Bureau if you feel your dispute was not handled correctly.