INTERPRETING YOUR CREDIT SCORE
Years ago, reading and understanding your credit
report was very difficult. Today, the three major credit
reporting agencies have changed the way they report your
information, making it much easy to read and comprehend.
Still, many people have a hard time understanding their
credit reports. Below are some guidelines and tips that
will help you easily interpret your credit report.
What your credit report consists of:
-- Your identifying information - name, Social
Security number, date of birth, address, previous
address, and employer. This is known as the "Credit
-- Your payment history - mortgages, auto loans,
unsecured loans, credit
cards, store credit cards,
account in collections and public records
like court judgments and bankruptcies.
-- Inquiries of your credit report - Shows who accessed your report and
what the reason for pulling your credit report was. For
example, if you apply for a loan or credit card.
Differences in reporting
Each of the three major credit reporting agencies use
a different layout for reporting information. For
example, Trans Union lists your SSN, date of birth, and
phone number in the upper right-hand corner. They also
exhibit the date from the time your information has been
present on your file. The upper left side
lists your name, address, previous addresses, employment
information and the date the information was reported.
Your negative credit information is the first data to be
listed on your credit report.
Experian lists a small summary of items that are
considered 'potentially negative'. This will include any
accounts you have with creditors and/or items listed in
public records. Your accounts that reflect a positive
credit history will be listed next. Your identifying
information is listed on the last page of the report.
Public records, accounts with late payments and
collections will be listed after your identifying info.
Making sure your identifying information is correct
This is very important. If the information present is
not right, it can mean that someone else's data will be
listed in your credit report. Errors can include having
the wrong name, address, SSN, etc.. Having a Jr. listed
when you are a Sr. or a name of a relative that is very
similar to yours can also occur.
Understanding how your credit history is reported
First off, you need to make sure that all of the
credit history information is 100% accurate.
Your credit report will typically list negative items
first in the following order:
-- Public records
-- Late payments
Next, your credit report will list all of your positive
accounts. Experian and Trans Union will list these
accounts as 'never late', while Equifax reports them
'paid as agreed'.
This will include what companies are pulling your credit
report, and for what reason. There are two types of
inquiries: 'soft' and 'hard'.
'Soft' inquiries do not have an impacting effect on your
score. 'Soft' inquiries include any sort of promotion,
like a pre-approval, by a creditor. You can stop these
offers from being presented to you by calling
Your creditors will usually hold 'account reviews' of
your accounts about once/year. Some credit card companies
may raise your interest rates after reviewing your
account. These 'account reviews' are also 'soft'
'Hard' inquiries occur any time you apply for any sort of
credit or loan.
Understanding account history status codes
A series of codes for classifying bill payment
history. Below is a list and
explanation of these codes.
R1 - Always pay your bills on time.
2 : 30-59 Days Past Due
3 : 60-89 Days Past Due
4 : 90-119 Days Past Due
5 : Over 120 Days Past Due
7 : Included in Wage Earner Plan
8 : Repossession
9 : Charge-off
Blank : No data available for that month
0 : Too new to rate, or unrated
1 : On time
Below is a breakdown of the meaning of account
descriptions as listed your credit report:
-- Company Name - Creditor
-- Account Number - Equifax and Experian do not include the last four
digits of your account. Trans Union includes the entire
-- Date Account Opened - When you first opened your account. Does not
mean that you started using the account when it was opened.
-- High Credit - The highest amount that you charged at any given time.
-- Credit Limit - The maximum amount you are allowed to charge at one
-- Terms Duration - The amount of payments that you have made.
-- Number of Months Reviewed
-- Date Reported - The last time your account was updated by the creditor.
-- Balance - The total amount that you owe on your account.
-- Past Due - Indicates a late balance.
-- Date of Last Payment
-- Amount of Last Payment
-- Scheduled Payment Amount - The minimum amount you were/are supposed to
-- Activity - The most recent activity on your account.
-- Date of Last Account Activity - When you used your account last.
-- Date of Reported Delinquency - The first time a late payment was
-- Charge-off Amount
-- Deferred Payment Date - Date the next payment was moved to.
-- Balloon Payment Amount
-- Balloon Payment Due Date
-- Creditor Classification - What kind of company your creditor is.
-- Date Account Closed - The date when your account was deactivated.
Your payments status will also be listed with each
account. Your 'current status' will either be listed as
'pays as agreed' by Equifax and 'never late' by Experian
and Trans Union. If you have been late with a payment/s,
it will indicate how many days you were late.
The type of account will also be listed. Specifically, it
will list your account as 'revolving' for credit cards,
'installment' for mortgages, personal loans and auto
In addition, it will be listed whether your account is
owned by you individually, or jointly with a spouse or
Understanding your credit report is not too hard if you
take the time to read and interpret it slowly. If you
have any questions, please
More helpful articles about credit reports:
The Significance of Acquiring a Your Credit Report
Educating Yourself on How Your Score is Calculated
Fixing Inaccuracies on Your Credit Report
Improving Your Credit Report Score