Credit Information - How to Read a Credit Report
By: Deanna Mascle | Posted: 25th February 2008
Everyone should have some basic knowledge on how to read their credit reports and what all those numbers mean. There are so many people out there today who have no idea what their credit score is, and an additional number of people who know nothing about credit reports at all. Here are a few basics that everyone should know when trying to read a credit report.
First of all, if your credit report is pulled by another source other than yourself, you will have a credit inquiry on your report. The inquiry will affect your credit score. You will not receive any notice of your report being affected, not in writing or by phone, but it will make a small difference and you will be slightly penalized.
When you look at the top of a credit report, you will see the words "Prepared For" as well as "Attention." Prepared For will tell you what lender the credit report was actually made up for (who pulled the report), while the Attention blank will give you the actual name of a person and not just the company. Usually the Purpose of the Loan is also shown; and the Report Type will explain whether the credit report is for an individual or for a joint partnership.
Other sections that will be included on your credit report will be: Mortgage/Landlord Verification, Credit Summary (this can be the scary section), Vendor Errors (located right under the Credit Summary so you don't look completely incompetent, often times, depending on the section, they do), and Scoring. There is sometimes a reason that is labeled as to why the score is what it is, but not always. There is no rhyme or reason for these reports; the entire field is clearly not rocket science.
The Vendor Information works on a number score basis, and these scores will be listed. A 0 will mean that the account is too new to rate for that vendor, a 1 will mean that you paid them, 2-6 will tell how many days you have been blowing the vendor off (for instance 5 means 120 days past due), 7 shows that you are bankrupt, 8 means that they had to come to your home and take away your things (repossession), and 9 means that you have bad debt issues. If you get an X that means that they don't have any information on you - yet. If you see an N this will mean that you have a zero balance. Make sure that you have provided the right calming essentials when reading this part of the report because a number 2-9 could give you a really bad day, or headache, take your pick.
Trying to untangle your credit report can be, at the very least, frustrating and discouraging. There are benefits to it though. By learning to read your credit report you are taking control of your financial well being and not leaving it in the hands of chance. Be patient and try to understand what you're reading. In the long run it will be worth it to you to figure it all out. By following these few steps you may find yourself coming out well ahead of the rest of the pack.
Learn more about personal finance budgeting at http://answersaboutfamilyfinance.net/
About the Author
Occupation: writer/teacher
Teacher, coach, and writer
Deanna Mascle is a
Renaissance Woman Online who published four ezines and three newsletters as well as maintaining several web sites that reflect her experience and interests.
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Tags: partnership, rocket science, credit score, credit reports, credit report, credit inquiry, basic knowledge, landlord, rhyme