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Here’s How to Decipher Your Credit Report

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Reading all the official records and data listed in your credit report can feel overwhelming. But knowing what you can expect to see can make the process a little less stressful.

To help you understand what’s in a credit report, we’ve listed the main sections with explanations. You can get a free copy of your credit report annually from each of the credit reporting agencies — Experian, Equifax, and TransUnion — and the Consumer Financial Protection Bureau recommends looking at it at least once per year.

It’s worth mentioning upfront that the agencies typically don’t include your credit score in their reports. While each agency’s report may differ slightly, below is a list of the main sections and what they mean.

1. Your personal information

This section will include your name, history of addresses you’ve provided to lenders, date of birth, and phone number. You may also see your spouse listed here or the names of co-applicants on your accounts.

A list of current and former employers will also be in this section. If you’ve made any personal statements, including if you initiated a security freeze, included a consumer-initiated statement, or added power of attorney, these details may also be included in this section.

2. Account information

Next, you’ll find a long list of current and former credit accounts, their account numbers, and the type of the account. These may include credit card accounts, mortgages, student loans, vehicle loans, etc. Each credit reporting agency decides which accounts are listed on the report.

This section will also include when you opened each account, the original loan amount, and how much money you owe. It will also list your monthly payment amount, credit limit, the highest balance you’ve had on that account, and how long the loan term is, if applicable.

The accounts will also have a line identifying your responsibility for the account, including whether it’s an individual account, if you’re a cosigner, or if you’re listed as an authorized user.

3. Status of your accounts

The account status may include opened, paid, closed, transferred, or foreclosed statuses, and — if a payment is currently late — a number indicating how many days late the payment is.

According to Experian, accounts can be sent to collections three to six months after a loan defaults.

4. Payment history

Under each account, you’ll also see detailed information about the account’s payment history. The payment history may include several years of your monthly payments, according to Experian, and will show the status of the account.

For example, if you have a mortgage and pay it as agreed every month, there will be a line that says the account is open and whether or not there have been any late payments.

Each credit bureau uses a different system indicating whether the account is paid regularly. For example, my Experian credit report has check marks each month that a payment met the agreed-upon terms, while TransUnion put an “OK” in the month of those same payments.

5. Lender comments and borrower statements

This section may include a”statement of dispute,” a “statement of explanation,” or comments made by a lender.

You can submit a statement of dispute for an error on your credit report. A statement of explanation is when a borrower writes an explanation for why they may have a negative payment history on an account, such as during a time of financial hardship.

6. Creditor contact information

Each account listed on the credit report will have contact information for the lender. This information will include an address and phone number.

7. Debts sent to collections

If an account is very delinquent, it may be turned over to your lender’s internal collection department or sold to a collection agency. If the account is sold to a collection agency, it may appear on your credit report as a separate account.

According to TransUnion, collections stay on your credit report for seven years, even after they’ve been paid. The only exception is in New York, where a collection is listed on a credit report for five years.

8. Bankruptcies

Bankruptcies are listed on a credit report and generally stay there for seven to 10 years. A Chapter 7 bankruptcy, which is a bankruptcy in which the borrower doesn’t have to repay any debt owed, stays on the report for 10 years.

A Chapter 11 bankruptcy, in which the borrower has to pay back a portion of their debts, stays on a credit report for seven years.

9. Credit inquiries

All credit reports will list hard and soft inquiries on your credit. Hard inquiries are made when you apply for credit or financing. For example, applying for a new credit card may result in a hard inquiry.

Soft inquiries are when a company checks your credit report so it can send you pre-approved offers or when current creditors do a periodic check of your report, according to Experian.

10. Unpaid alimony and child support

Equifax notes that unpaid child support and alimony may be listed on a credit report. Unpaid alimony and child support payments may remain on a credit report for up to seven years.

11. Summary of rights

This is a list of your rights under the Fair Credit Reporting Act and any rights you may have based on your state. This section also typically includes a list of consumer protection agencies.

While it can be intimidating to read through your credit report, looking at it regularly will help you identify incorrect information and give you a clear picture of how potential lenders may view your creditworthiness.

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