That’s why it’s important to know your credit score and keep track of it. Luckily doing so is easy. Everyone is guaranteed one free copy of their credit report a year from the three credit bureaus: Equifax, TransUnion, and Experian.

But once you have the report in your hands, then what? There is a lot of information in a credit report to sift through. We want to help you understand your credit report including what to look for to keep yourself financially safe.

What is a Credit Score

Your credit score is a three-digit number ranging from 300 to 850. It sums up the information in your credit report.

Credit scores are calculated by an algorithm that uses information from your credit report, which includes data like your loan payment history and credit card balances. The intention of a credit score is to predict the likelihood that you make your payments on time or if you will go delinquent on your payments.

The higher your credit score, the better your credit is. While scores vary some, in general they fall in the following range.

Above 750: excellent credit

700–750: good credit

650–700: fair credit

600–650: bad credit

Below 600: very bad credit

In other words, make sure to make your payments on time and don’t carry high credit card balances. Also, don’t take out a loan you’re not 100% sure you can’t pay off. Defaulting on loans can drop scores by hundreds of points.

Personal Information

When you get your report, you’ll find a collection of personal information used to identify you. This will include your name, address, social security number, date of birth, place of birth, and phone number. It may also include previous addresses.

Before moving forward, review this information, It’s ok to have different variations of your name and old address on it. But make sure they are all accurate.

Double-check the social security number to make sure it’s yours. Also, Make sure all the addresses listed are places you’ve actually lived. If the report says you lived in Malibu, Florida for four years, but you’ve never even visited, it’s something you’ll want to check up on. 

Credit Summary

The credit summary section is an overview of the different types of accounts you have. The sections lists your accounts along with the balance, including current and delinquent accounts.

It will include a variety of accounts, including real estate accounts, revolving accounts like credit cards and lines of credit, installment accounts, any accounts that have been sent to collections, and any other miscellaneous accounts that don’t fall into the other categories. 

Your credit summary will also summarize the number of accounts you have open, closed, and the number of inquiries made against your credit within the past two years.

Credit History

This section will have the bulk of the information in the report. It includes details on each of the credit accounts you have opened, including the name of the creditor, your monthly payments, the highest balance on the card, payment status and history, and more.

Read through this section thoroughly. 

We repeat. 

Read. This. Section. Thoroughly.

Once you’re done, do it again.

Look for any discrepancies, like accounts that were opened that you don’t remember. Check for payments being noted as late that actually weren’t. Make sure credit cards and other lines of credit that you have closed are actually closed. If any of these is incorrect, it’s a huge red flag and could mean you’re at risk of identity theft.

Public Records

You want this section to be blank. The activity listed here consists of bankruptcy, tax liens, and judgments. This information may stay on your report for 7-10 years.

Credit Inquiries

This section lists everyone who has accessed your credit report within the past two years. You will see both kinds of inquiries listed; soft and hard. 

Soft inquiries are from companies who want to send you promotional materials or current creditors checking your account. Hard inquiries are made when you actually apply for a credit card, loan, or mortgage. Only hard inquiries are shown to lenders.

One thing to note; Hard inquiries cause your credit score to drop a few points, so be sure you’ve truly given your permission for a hard inquiry to your credit. These should disappear from your report after about two years.

How to get your Credit Report

There are three main credit bureaus that are used by the majority of financial institutions and businesses to check consumers’ credit: EquifaxExperian, and TransUnion.

You can receive one free credit report per year from each of the three credit bureaus listed above. But you have to ask for them.

There are a few things you will need to get that report, including:

  • Your name

  • Address

  • Social Security number

  • Date of birth

If you've moved within the last two years, you should include your previous address. To protect the security of your personal information, you may be asked a series of questions that only you would know, like your monthly mortgage payment.

If you have any questions about your credit score, we would be happy to help. Give us a call in Searcy at (501) 278-3080 or (501) 278-3085, or in Augusta at (870) 347-2511.