Understanding Your Credit Report

After you find free credit reports, you will need to know how to interpret the information in your report. Here is a guide to help you better understand your credit report.

What a Credit Report Is

A credit report is like a financial report card. It is a record of your financial behavior to help lenders gauge the risk in lending to you. Employers also sometimes use credit reports to evaluate how responsible and trustworthy you are. Credit reports are maintained by three major credit-reporting agencies: Equifax, Experian, and TransUnion. When you find free credit reports, you will likely end up going through these organizations. By law, you are entitled to one free credit report per year from each credit bureau. If you find free credit reports that contain inaccuracies, you can dispute these items with the credit bureau that maintains the report.

Components of a Credit Report

After you find free credit reports, you will notice that the reports are split into four sections: identifying information, public records, inquiries, and credit history. An explanation of each section is included below.

• Identifying information. This section usually includes your name, social security number, birthdate, telephone numbers, current and past addresses, driver's license number, your spouse's name, and your current and former employers. You will see once you find free credit reports that this section often contains inaccuracies.
• Credit history. This section lists all of your accounts, past and present. Each account will usually include the creditor's name and their account number. The entry will also state when you opened the account, the type of credit (e.g., installment loan, credit card, etc.), any joint account holders, the total loan amount or high credit limit, outstanding balance, monthly payment amount, status of the account, and a record of your payment history.