How to Read a Credit Report Step-by-Step

The Fair Credit Reporting Act entitles you to three free credit reports every 12 months. You can order one report from each of the major credit bureaus: TransUnion, Equifax and Experian. The free reports are available from the Annual Credit Report website, which is managed by the credit bureaus and endorsed by the Federal Trade Commission. MSN Money reports that the credit reports may not all show the exact same information. For example, a creditor may report your payment history to just one credit bureau or to all three.

Instructions

1

Order your credit report from Annual Credit Report. The Federal Trade Commission reports that other sites may offer free reports, but they may also try to sell you a service. Annual Credit Report never charges a fee for the free reports you're entitled to by law.

2

Read the report, which will be divided into four sections: identifying information, credit history, public records and inquiries.

3

Check the identifying information for accuracy. The information listed here typically includes your name, current and previous addresses, your date of birth, driver's license number, your employer's name and your spouse's name. MSN Money reports that you shouldn't worry about minor errors such as misspellings in your name. However, you should contact the credit bureau if someone else's name and address is listed on your report. Report this type of error by writing a letter to the credit bureau at its address listed on the credit report.

4

Review the second section containing your credit history. Your individual credit accounts are listed and may be referred to as "trade lines." This section offers a variety of information, including the type of credit --- such as a credit card or mortgage --- the total amount of the loan, the highest credit limit you've had on the account, the monthly payment and the current status of the account. The credit report shows whether the account is open or closed or if it's been charged off and sent to a collection agency. There's also information describing how well you've paid the debt, including the number of times you've paid late.

5

Read the public records section for information on court-related actions reported about your credit, such as bankruptcies, judgments and tax liens.

6

Check the final section on inquiries for a list of creditors who have viewed your report. So-called "hard" inquiries are made by creditors who pulled your report after you applied for credit. "Soft" inquiries are made by current creditors who regularly monitor your credit or by other creditors gathering names and addresses for promotional mailings.