How to Interpret Credit Reports

Anyone who has taken out a loan or has a credit card has a credit report. That means that most adults have one, even if some don’t realize it. The first time you see a credit report, you might not have been taught much about it. A credit report is an incredibly important document, so it’s important to understand how to use it. It might seem like a lot at first, but a credit report actually becomes very easy to understand when you review it. Your credit report is all information about you and your finances, so it will likely make sense once you look it over.

What’s on a credit report?

First, your credit report will include all of your information. This has your basic information, like your name, current address, any previous addresses, and your date of birth. It also includes more of your personal information relevant to your credit score. Importantly, it has your social security number on it. It will also have a history of your employment information.

Next, your credit report will outline all of your accounts. This will include any information about your credit cards and loans. Whether or not your accounts are still open, and the dates they opened and closed will also appear. The type of loan you have will be listed, as well as your credit card limits.

Of course, a credit report will also include any negative information, if you have any. Being sent to collections can be put on a credit report. If you file for bankruptcy at some point, that will also be made clear on the report. These will show on your credit report for seven years. 

Why is a credit report important?

It can be easy to forget about your credit report when you don’t need it. You should get in the habit of checking it about once a year. It is possible that the wrong information could appear, so you want to correct it quickly. You might also find that you’ve been a victim of identity fraud through your credit report. By checking it regularly, you could be able to catch it earlier on.

You’ll need to show your credit report a number of times during your life. This shows important information about you to people who could be making decisions to lend you money. For example, you’ll need a credit report if you’re looking for a mortgage to buy one of the many Halton homes for sale. If your credit report shows that you’re a trustworthy person. If some past troubles come up on your report, it could become more difficult for you and require you to put in more work to get a loan or a mortgage. It’s understandable that at some point you may run into financial issues that could show up on a credit report, but it’s important to try to keep your finances on track. 

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