How to Analyze Credit Reports

You have three credit reports compiled by the three major credit reporting companies: Experian, TransUnion and Equifax. These reports help companies decide whether or not you are a good credit risk and a candidate for a credit card or mortgage. Analyze your credit reports at least yearly to check for any errors. If you find an error, you have the legal right to dispute it with the company. Send a letter to the company explaining the error and back up your claim with photocopied documents, as recommended by the Federal Trade Commission.

Instructions

1

Examine the first column under "Credit History." This lists the names of the companies with whom you have an open account or a past, closed account. For example, it may list a store credit card, a major credit card and a loan. The column directly to the right lists your account number with that company.

2

Analyze the letters in the third column. You may see a "J," an "I" or possibly an "A." These indicate that the account is a joint account, held by only one individual or held by an authorized user, respectively. A "T" means a terminated, or closed account, whereas a "C" indicates that you are the co-signer to an account.

3

Scan the next three columns for each of your accounts. They indicate the date on which you opened the account, the number of months for which information is available to the credit reporting agency and the date of the last activity in the account. The date of activity may indicate a payment or any other change to the account, such as an increased line of credit. This column will not disclose the specific type of activity.

4

Examine the seventh column, after the date of activity column. This one is labeled "High Credit," and it discloses either the maximum line of credit you have with the account, or the maximum amount of money you have charged. The eighth column indicates the terms of the account. If it is a loan, for example, this number indicates the number of payments on the account.

5

Compare your balance on the account to the ninth column, labeled "Balance." If the numbers do not match up, this does not automatically mean the credit report contains an error. The balance in the ninth column only displays the balance at the time the credit reporting agency received the information. You may have made additional payments since then. The next column, labeled "Past Due," may also have an error because of time lag. This will only indicate an amount past due at the time the information was reported. The date of the last information update is in the last column for each account.

6

Interpret the letters in the second-to-last column, labeled "Status." An "O" indicates an open account in which the balance must be paid each month, whereas an "I" indicates an account with fixed payments and an "R" means revolving, or the payment amount can vary. These letters may have a number after them. A "1" is desirable, as it indicates you have made payments as agreed upon. A number between two to five means that you are past due. A "7" indicates that you are following a payment plan, whereas an "8" indicates a repossession and a "9" means the account is charged off because of bad debt. A "0" means the account is not rated yet.

7

Analyze any additional information on your credit reports. The credit report will also tell you if you are delinquent in any accounts, the number of times you paid late, any accounts turned over to a collection agency and public courthouse records, such as a property lien or bankruptcy. It also lists any known previous addresses and places of employment, as well as a list of people or businesses that have requested your credit report for the past two years.

8

Compare all of this information on your three credit reports. Note any discrepancies. Compare this information to your open accounts, debts and credit lines to determine if there are any errors.