Learn How To Read Your Own Credit Report
It is easy to be confused even to look at your own credit report. There are numbers, codes and abbreviation that credit report agencies put in some rows and columns in your credit report. If you don’t have any training, probably you don’t have a clue whether your credit report good or bad; especially in free credit reports that you received without a credit score.
Every credit report agency lays out their credit reports differently; but
overall there are some common sections that they are included in every credit
report:
Identifying information, Summary, Public record, Collections, Tradelines and Inquiries.
1.
Identifying information: The information to
identify the borrower, name, social security number, home address. Other
information might include other or former names, current and previous addresses,
date of birth, telephone numbers, driver's license numbers, employer and
spouse's name.
2. Summary: In this section you will see total of all your debts in real estate, revolving or option, installment, open account or line of credit.
3.
Public Record Information: The public record section is never a
good story. If a person has public records, he has problems. Either someone
filed a law suit against him or he owed Federal tax or property tax lien somewhere. It
doesn't list arrests and criminal activities; just financial-related data, such
as bankruptcies, judgments and tax liens. Those are the public records that will
destroy borrower’s credit faster than anything else.
The
following typical retention periods may vary in some cases by state:
•
Civil judgements: seven years
•
Unpaid tax liens: indefinite
•
Paid tax liens: seven years from date paid
•
Chapter 7, 11, or 12 bankruptcies: ten years
•
Chapter 13 bankruptcy filings: ten years
•
Chapter 13 bankruptcy dismissal or discharges: seven years
•
Bankruptcies voluntarily dismissed: seven years
4. Collections: Bad loans that creditors sent to collection agencies.
5.
Tradelines: All individual or
join accounts are listed in this section. Charged off accounts are the accounts
that not paid in full or not paying at all. They are listed under Derogatory
Tradelines.
Each
account will include the name of the creditor and the account number:
· The kind of credit:
I: Installment, such as car loan, student loan
M:
mortgage loan
R:
revolving, such as a department store credit card, Master card, Visa.
·
Whether the account is in your name alone or with another person
·
Total amount of the loan, high credit limit or highest balance on
the card
·
How much you still owe
·
Fixed monthly payments or minimum monthly amount
·
Status of the account (current, closed, paid, etc.)
· How well you've paid the account:
Manner
of Payment (MOP) or Account Status : Next to the balance of the account you will find the MOP or
Manner of Payment. Some report agency uses the plain words to describe the
status of your account like paid As Agreed. Other report agency uses codes that
describe how good of the payments of this
account. The payment codes ranging from 1 to 9; an R-1, I-1 or M-1 on a report
is an indication of a good payment history on a revolving, installment or
mortgage account. Any code number that greater than 1 is no good. Example: code
R-9 is a worst case of revolving account that the borrower hasn't made no payment at all.
30/60/90
Day Counter or Account History : How many times the subject was 30 days, 60 or 90 days past due.
4.
The inquiries: That's a list
of everyone who asked to see your credit report. Any time anyone gets into the
report, it'll post an inquiry.
5. Creditors' Contact Information: The last section is a list of all creditors' mailing addresses and phone numbers. Contact these creditors if you do not recognize the information listed in your credit report or if you have questions regarding any account reported by them.
Sometime
the borrower will find mistakes on credit report -- an account that isn't yours
or an outstanding balance that should be zero. You'll need to fill out the form that comes with the
report, or follow the instructions on the explanatory sheet. The fastest and
more convenient way to dispute mistakes in credit report is to do it online. All
three major credit report agencies have their websites for consumers who want to
dispute mistakes that showed in their credit reports.
The process takes time because the creditors have 30 days to respond to a charge
of a discrepancy. As long as a charge is in dispute, that dispute will show up
on borrower’s report as a dispute amount.