Here Are A Few Basics That Everyone Should Know When Trying To Read A Credit Report

Category: Finance, Credit.

Everyone should have some basic knowledge on how to read their credit reports and what all those numbers mean. Here are a few basics that everyone should know when trying to read a credit report.

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. The first thing you need to be aware of is if your credit report is pulled by someone else other than yourself, this will result in a credit inquiry on your report, which will also affect your credit score. The inquiry counts as a penalty and will make a small difference on your score. You will not be notified of this at all. 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. And the Report Type will explain whether the credit report is for an individual or for a joint partnership. Usually the Purpose of the Loan is also shown.

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, depending on the, often times section, they do) , and Scoring. There is no rhyme or reason for these reports. There is sometimes a reason that is labeled as to why the score is what it is, but not always. The entire field is clearly not rocket science. 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. The Vendor Information works on a number score basis, and these scores will be listed.

If you get an X that means that they don t have any information on you- yet. 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, take your pick, or headache. If you see an N this will mean that you have a zero balance. Trying to untangle your credit report can be, at the very least, frustrating and discouraging. 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. There are benefits to it though. Be patient and try to understand what you re reading.

By following these few steps you may find yourself coming out well ahead of the rest of the pack. In the long run it will be worth it to you to figure it all out.

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