My How To: Read a Credit Report

The credit report is a point of pride for me. I have no credit accounts open and all are paid in full and closed, yes it’s a great feeling to owe no one a single red cent. But for educational purposes it is vital to learn how to navigate your credit report to protect yourself against fraud and inaccuracies.

At the top of the report will be personal information that spits out giving your legal name, social security number, address and phone number. Give those a good look over just to make sure there are no typing errors (we’ll cover what to do if you find one a bit later). But for now onto the meat and potatoes:

Exhibit #1:

In large caps is the name of the creditor you are on file with. There’s tons of good data here including the creditor’s address and phone number. You can also see what your credit limit was, if there is an outstanding balance, what the outstanding balance is and when the account was opened and closed. There’s also a coded key that notes if historical payments are on time (OK) or 30, 60 or 90 + days past view. The most important line I like to circle like a vulture: LOAN TYPE and REMARKS. In my example this was a credit card with a credit limit of $7,000 that was paid and closed in January of 2009.

So for my report I scan through a page or two worth of credit history on my report to ensure that all accounts are closed AND that all accounts are truthfully mine.

Exhibit # 2

The account review inquiry screen shows you a history of who has inquired to see information on your credit report. If you do not choose to opt-out of promotional screening, this tab will be littered with inquiries from our enemies at American Excess and people who want you to Discover bondage. I have opted out of promotional screening offers of credit and these inquiries are fancy talk for requests prompted by myself to have the credit reporting agencies pull my credit report.

Exhibit # 3

This is a communication confirmation that I have opted out of receiving promotional offers of credit. So Visa will have to go lurk elsewhere.

Exhibit # 4

Now there’s a ton of goodies here in spite of the small print jargon. Our consumer rights are direly important when facing fraud or inaccurate reporting. There is a link to the FTC.GOV website that provides steps and procedures on what to do in either situation. But essentially it boils down to this: When reporting fraud or inaccurate reporting the credit reporting agency has 30 days to settle the dispute with the creditor. If unresolved/unanswered then following 30 days the disputed item must be removed from the credit report. If the creditor says the item is accurate then your beef is with the creditor and no longer the credit reporting agency. So you’ll have a new hobby fighting and providing proof and fighting some more that the item is inaccurate/fraud. If it is fraud be sure to get a police report from your local crime fighters so that you have documentation to provide to lenders and the credit reporting agency.

There is also a phone number provided, toll-free, that will prompt you through opting out of prescreened offers. This is what I used and the process was relatively painless. So there you have it, a quick walk through something I hate having but love to check.

My How To: Pull Your Free Credit Report

Let me be perfectly clear here: I absolutely hate the credit score and everything it stands for and represents. But every four months I review, for free, my credit report. Here’s the difference:

Credit Score: This is an I love debt score. You have to pay to obtain this number. If you get a $1 million a year raise or your inherit $10 million your credit score doesn’t change a single point. In its entirety, a credit score circles around credit: how much, what types, how long, and is not a statistical measure of building wealth.

Credit Report: A historical and ongoing snapshot of debt accounts.

I use credit report checks to ensure past reported debt accounts are closed and that no new loans have been opened fraudulently in my name. You can obtain a credit report for free once a year from each of the credit reporting agencies: Equifax, TransUnion and Experian. So spaced out over a year and you can pull one free report from each agency every 4 months.

But the process of going through and navigating the web can be tough to navigate as everyone has an incentive for you to click the wrong place and pay for something you don’t really need. So here’s a step by step guide on how to pull your free credit report.

(1)   Head over to annualcreditreport.com to begin, the website will have a selection bar like this. Go ahead and select the state you reside and click “Request Report”

(2)   You will be prompted to this screen to enter verifying personal data about yourself as well as a selection of which credit reporting agencies report you would like to pull.

(3)   From there you’ll be asked to enter the last 4 digits of your social security number.

(4)   You’ll be prompted for a few additional questions to verify you are who you say you are. Below are two sample questions I was prompted with. It can also ask something like, "Which of these addresses have you lived at?"

From there you can prompt yourself to the next screen where you will be able to view your credit report. So stay tuned for my blatantly obvious next post: How to read your credit report.