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How to Review a Credit Report

Reviewing your credit report is simple once you know what to look for. Ideally, you want to utilize the free credit report you can receive every year to make sure that your credit score and information are accurate. The last thing you would like to find out before buying a home or car is that your credit score is in bad condition. Checking your credit report early on will provide you with measurable data that you can use to rebuild or continue building a stronger credit score.

You can request your credit report from one of the major credit bureaus—Equifax, Experian, TransUnion, or Innovis. After receiving your credit report, read through it by looking for these sections.

Collections

Lingering debt may result in multiple collections accounts. This will look odd on a credit report, but always confirm that information such as the amount, and when it was collected is up to date.

Credit Inquiries

Each time you seek a new credit account, a lender will make an inquiry into your credit report. This will result in a “hard inquiry,” which will have a negative impact on your credit score. Having too many hard inquiries over a long period of time will lower your credit score.

When seeking new credit, focus your search on loans and other cards inside the same 45-day window to minimize the impact on your credit score. Doing this will ensure that credit inquiries are grouped together so it will look like you were comparing the different offers you have received.

Credit Lines

Information about your open lines of credit must be accurate to properly reflect you. Take special note on the payment history, credit limit, and balances listed on your credit report to make sure they are accurate.

If you see payments or accounts that are not yours, it is possible that someone has opened an account under your name. In this scenario, you might be a victim of identity theft. If this happens, set up a fraud alert with the credit bureau to display future fraudulent activity. Fraud alert is free of charge and creditors can help prevent future problems.

Personal Information

Personal information includes your name, address, employment, and income information. This information can be out of date depending on when your credit report was compiled. Outdated personal information does not have a major negative impact on your report and can easily be corrected.

Public Records

Financial matters of public record such as foreclosures and bankruptcies can have a dramatic negative impact on your credit report. If these events happen, they will appear on your record for 7 years. After 7 years, you can remove these events by submitting evidence of your claim to your credit bureau.


You can request a free credit report once every year, and it is easy to read through. Not checking your credit report can be a costly mistake, as false information on your credit report can impact your credit score. If you see errors on your credit report, you can easily fix them.

In the next lesson, learn more about How to Fix an Error on Your Credit Report


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