Credit reports are very important for anyone for fulfillment of their aspirations for getting financial assistance of any kind whether it is loans, mortgages or other. It is also true that each citizen is entitled to at least one free credit report from all the three leading credit bureaus; Experian, Equifax, and Trans Union annually. But the major problems are that most of the consumers have little idea about how to read a credit report.
Learning the Basics
While ordering the credit report, many people feel overwhelmed by the enormity of information they possess with the same. Both credit reports and credit scores of a person are critical for the financial well being of such person and therefore it is extremely important to understand its implication. That again, would be possible when the users know how to read a credit report. Learning the basic at least is indispensable for anyone.
Reading the Credit Report
Usually the credit report of a person would have four different sections.
- Section 1 of the credit report contains the identifying information about the person concerned. It includes information like name, address, the social security numbers, drivers license details, date of birth, name of the spouse, and information about the current employer.
- Section 2 deals with the credit history of the consumer and is the most important part of the report. Any error her should be immediately pointed out for rectification or it could adversely affect the credit worthiness of the person concerned. It also contains information on accounts opened, balance in the credit card, amount to be repaid, fixed payments, and defaults etc.
- Section 3 would contain all the public records like the information on bankruptcies of the consumer, his or her tax liens, judgments pronounced against the consumer by the court and such other information. If the section is blank, it will go greatly in favor of the aspirants looking for financial assistance since every entry will go against the prospective borrower.
- Finally, the section 4 deals with all the inquiries on the account of the user and every inquiry is included in this section of the report. It is important to identify credit report errors and get them rectified quickly.
A consumer can start learning how to read credit report on receipt of his or her annual free credit report.
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