Interpreting Your Credit Report

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Are ready to tackle your bad credit and increase your credit score? If so, the first step is to order your credit reports. But, if you are like most people, you may have a hard time understanding what your credit score means let alone interpreting all of the information contained in the pages and pages of you credit history.

Although each credit reporting agency may have a slightly different format, all credit reports contain basically the same categories of information. You can order all three free credit reports from, where it is easy to interpret them. Here are the basic categories of information found in your credit report.

Identifying Information

Your name, address, Social Security number, date of birth, and employment information are used to identify you. You may have multiple versions of your name, especially if you are a married/divorced female who has changed her name a few times. This section will also show any nicknames and abbreviations of your name that might be luring out there. Your current and any previous addresses will be listed as well. These factors are not used in credit scoring and updates to this information come from information you have supplied to lenders.

Trade Lines

These are your credit accounts. Lenders report on each account that is established with them. They report the type of account, the date you opened the account, your credit limit, your loan amount, the account balance, and your payment history.

There are three different types of credit account classifications:

  • Mortgage Accounts. These include first and second mortgages, home equity loans, and any other loans secured by real estate that you own.
  • Revolving Accounts. Revolving accounts are charge accounts that have a credit limit and require a minimum payment each month. The most common of these are credit cards.
  • Installment Accounts. Installment accounts are credit accounts where the amount of the payment and the number of payments are predetermined or fixed, such as a car loan.

Credit Inquiries

There are two types of credit inquiries, hard inquiries and soft inquiries. When you apply for a loan, you authorize the lender to ask for a copy of your credit report. This is a hard inquiry and these do affect your credit score.  A soft inquiry, or involuntary inquiry, is when a creditor orders your report prior to sending you one of those “pre-approved” offers for credit.  This type of inquiry does not affect your credit rating.

Public Record and Collection Items

Credit reporting agencies also collect public record information from state and county courts, and information on overdue debt from collection agencies. Public record information includes bankruptcies, foreclosures, suits, wage attachments, liens and judgments.

Satisfactory Accounts and Negatives Items

All three of the major credit reporting agencies (TransUnion, Equifax, Experian) will separate positive accounts from negative ones, thereby making the interpretation of your report a little easier. The Equifax report gives a nice “Credit Summary” which provides a one-page, easy to review snapshot of all your open accounts, as well as some useful summary statistics, such as total debt by account type, debt to credit ratio by account type, and length of credit history.

In the section showing the negative items, these accounts will be listed showing when a late payment occurred and how late is was, the balance on these accounts, and if this account was a charge-off or went to a collection agency. It will usually have the address of the creditor and the account number listed as well.

Credit Report Codes

We found a great site which provides each of the three credit bureau report layouts and an explanation of all the codes found on each report. This site explains the payment history codes, the public record codes, the trade check rating codes, and breaks down each section of the report. If there is anything on your credit report you do not understand, go to one of the links below and you will find out what all the codes mean.

Common Questions About Credit Reports

How often should you check your credit report? As a rule of thumb, you should check your credit report once a year. If you are planning any big purchases, like a house or car, it is a good idea to check your credit report well ahead of time so you don’t have any surprises during the loan process.

Why are my credit reports different? If you compare your credit reports side-by-side, you may notice they are not the same. That is because not all businesses report to all three credit bureaus. Credit bureaus typically do not share information so not all your account information makes it on to all three credit reports.

What does my credit report have to do with my credit score? Your credit report is a detailed history of your credit accounts including payment history, credit limit, highest balance ever charged, and age of the account. Your credit score is a numeric representation of your credit report.

Will my spouse’s information appear on my credit report? Your credit report will contain only your credit and loan accounts. The exception is joint accounts shared between you and your spouse. Here, the account history will be reported on both your and your spouse’s credit report. Similarly, if one spouse is an authorized user on the other spouse’s account or one spouse co-signs another’s account, the account history will be reported on both credit reports.

How do I know if I have any late payments on any of my accounts? All three reports seem to be pretty consistent on this. They use a little square with either 30, 60, 90, or 120 in it and you don’t want anything but a “zero” underneath that symbol. You want to see “OK” in green shown, or under “status” the notation “never late.”

What does “charged-off” – “bad debt” or “placed for collections” mean? This means the account went longer than 120 to 180 days without a payment from you. At this point, the credit card company decided the debt was not going to be collected from you, and decided to write it off. The company took the IRS tax deduction and sold the debt to a debt collector. Many of the recent real estate short sales may end up as charge-offs on a consumer’s credit report.

What does “Account Closed by Credit Grantor” mean? The credit card company was worried you would default on the debt and shut down your ability to access any more of your credit line. This sometimes happens if you are defaulting on other cards, also referred to as universal default.

What does “Account Balance” mean? Fairly straightforward, this is the amount owed on the loan, whether it is a credit card balance or the balance of a home mortgage or installment loan.

What does “High Balance” mean? This is the most you ever owed on the loan, whether it is a credit card balance or the balance of a home mortgage or installment loan.

What is “Date of Last Activity” (DOLA)? This will be specified on the report as “last updated” or “last activity” and basically is the last date any account activity occurred, typically the last time you made a payment.

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