Understanding your Credit Report

Contributed By: Geoff Stam, Director Default Management and Financial Literacy, Office of the Chancellor 

Your credit report contains information about your past and present credit transactions.  Consider it a review of how you utilize loans and other credit and how you pay those debts back.  It’s used primarily by potential lenders to evaluate your creditworthiness (ability to borrow).  If you plan to apply for credit, especially for something significant like a mortgage or a car loan, you’ll want to get and review a copy of your credit report prior to applying for that loan other type of credit.

What’s it all about?

Your credit report has four sections.  The first includes your personal information:

Your name, address, Social Security number, telephone number, employer, past address and past employer, and (if applicable) your spouse’s name. Check this information for accuracy; if any of it is wrong, correct it with the credit bureau that issued the report.

Section two contains public records; anything that would have been filed in a court for financial purposes such as liens, lawsuits, unpaid fines, or child support.

Section three (the largest portion) is account information. For each creditor, you’ll find the lender’s name, account number, and type of account; the opening dates, high balance, present balance, loan terms, and payment history; and the current status of the account. You’ll also see status indicators show your payment performance over the past 12 to 24 months. They’ll indicate whether the account is or has been past due, and if past due, they’ll show how far (e.g., 30 days, 60 days). Also shown are charge-offs or repossessions.  Because credit bureaus collect information from courthouse and registry records, you may find notations of bankruptcies, tax liens, judgments, or even criminal proceedings in your file.

In the last section, you’ll find notations on who has requested your credit information in the past 24 months. When you apply for credit, the lender requests your credit report.  That will show up as an inquiry. Other inquiries indicate that your name has been included in a creditor’s prescreen program. If so, you’ll probably get a credit card offer in the mail.

Please feel free to contact me if you have any questions or suggestions.  If there is a specific topic you would like to hear about, please let me know.  I am based at the Keiser University Jacksonville Campus and can be reached at (904) 296-3440 extension 139, or gstam@keiseruniversity.edu.  The i3 Group can be reached at 1-866-296-7955 or www.i-3group.com. You can register for a free iontuition.com account at www.iontuition.com.