Understanding Your Credit Report

Traditionally, your credit report has looked like something out of a data collector's worst nightmare. Codes, lines of data, and mysterious marks made them very difficult to read. In the past decade, things have become much easier to read and understand. All three major reporting agencies follow similar formats for their consumer reports. Direct lender pulled reports are a bit more difficult to understand, but essentially all three agencies have the same information on the reports. Personal, Employment, Public Records, Revolving Accounts, Installment Accounts, Mortgage Accounts, Collection Accounts, Inquiries and Creditor information.

Personal Information:
Every report will contain personal information. Every time you fill out an application for anything, this information generally ends up in your credit file. Information such as telephone number, current address, and former address may be listed.

Employment Information:
On those same applications, you may have had to list you employer. This is especially true in the case of an application for the extension of credit. This information will end up on your file.

Public Records:
A public record listing is any information obtained from county, state and federal courts. These types of records include bankruptcies, civil judgments and tax liens. Each entry should have a file date, case number, balance and other relevant data.

Revolving Accounts:
The term revolving account is often used interchangeably with a credit card. These accounts revolve in the sense that when you utilize them, what you owe is reported as greater and available credit goes down. When you pay it off, the opposite occurs. Understanding how these types of accounts report is fairly easy. The trade line usually reports the last 2 years of payment history, current limit, and current balance. Be aware; Revolving accounts often have a major impact on your credit score.

Mortgage Accounts:
All obligations that are secured by a mortgage are provided here. This will include purchases, refinancing, and home equity lines of credit.

Installment Accounts:
Unlike credit cards, these accounts do not revolve. The account starts with a fixed amount owed that goes down with subsequent payment. The formatting on the report will be similar to those of a revolving account. Examples of this type of account are automobile loans and student loans.

Collection Accounts:
Collection accounts involve third party companies that have either purchased past debt obligation, or are assigned to collect on debt obligation that are alleged to have owed and not paid in accordance to the stipulation of your contract.

Every time you apply for credit, or there is lender with business justification (collection company checking for new information), the inquiry is recorded and listed for other creditors to see. This information will fall off your report after two years.

Source by Scott Sweeney

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