Reading a Credit Report

According to TransUnion, one of the major credit bureaus, there are four major areas of content in your credit report:

Identifying information. This includes your name, phone number, address, Social Security number and date of birth. It may also include a list of your current and previous employers and previous addresses.

Credit history. Your credit history is a summary of your credit transactions. This is the core of a credit report. It includes your payment history, including any late payments, to banks, credit card companies, retailers and other lenders. Other lenders include mortgage and auto-finance companies. These items remain on your credit report for seven years.

Public records. If you owe a creditor or tax agency a debt and do not pay it, expect to have a public lien against you. For example, a person who owes property taxes but does not pay them is likely to have a lien filed against them by their local property tax board.

Public records include any filings of personal bankruptcy or court judgments against you. These items remain on your credit report for seven years, except bankruptcies, which remain on your credit report for 10 years.

Inquiries. There are two types of inquiries: hard and soft. A hard inquiry remains on your credit report while a soft inquiry does not. Frequently applying for credit will run up the number of hard inquiries on your credit report. Some prospective lenders may interpret that as a sign of your desperation for credit.

A credit report also shows any current credit that you have, including amounts owed, amounts available (such as on a credit card or other form of revolving credit and payment amounts on installment loans.

Lenders seize on this area of the credit report since it lends immediate insight into how much credit you may need, how well you pay back your debts and how much your monthly payments are likely to be if they approve your loan request.

The following items are not on your credit report:

Deposit information. Deposits are assets and not a form of debt, after all. A credit report focuses on your liabilities.

Credit score. Credit scores are generated based in part on the contents of a credit report. However, they do not constitute a part of the credit report. The credit bureaus will sell your credit score for a low price, however. We discuss credit scores later in this educator.

Race, gender, ethnicity or national origin. The Equal Credit Opportunity Act prohibits the use of this kind of information to avoid any discrimination in lending practices.

Business debts. If a debt is personally guaranteed, a business debt may show up on your personal credit report. Otherwise, it won't.

You should review your credit report at all three major credit bureaus. Check for errors or omissions in any and all three major reports. Discrepancies may exist between them. If you find an error or note an omission, contact the credit bureau directly.