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Credit

How to read your credit report

7 min read · General education, not legal or financial advice

Overhead view of a wooden desk with a laptop, a cup of coffee, a spiral notebook, two pens, a mouse and a magnifying glass

A credit report can look like a wall of abbreviations and dates the first time you open one. Once you know how it is organized, it becomes much easier to follow. This article walks through the sections a typical report contains, explains what the entries in each section mean and describes some of the things people commonly look at as they read. It is general education: it explains how reports work, not what any one person ought to do with theirs.

What a credit report is, and who keeps one

A credit report is a record of how a person has used credit. In the United States, the three nationwide consumer reporting companies, often called credit bureaus, are Equifax, Experian and TransUnion. Each one is a separate company that keeps its own file, built from information that lenders, card issuers and other businesses send to it. Those businesses are called furnishers.

The Consumer Financial Protection Bureau (CFPB) points out that creditors are not required to report to every credit reporting company. That is why the three reports about the same person often differ a little: one bureau may list an account that another does not, or show a balance from a different month.

Reports are used for more than loan applications. The CFPB lists lenders deciding whether to lend and at what interest rate, businesses deciding on insurance, rental housing and services such as utilities or cell phones, and employers, though an employer can see a report only if the person agrees.

Getting a copy

The Federal Trade Commission (FTC) explains that federal law gives everyone the right to a free copy of their report from each nationwide bureau every 12 months on request, and that the three bureaus have permanently extended a program that allows a free check of each report once a week. The FTC also says that only one website, AnnualCreditReport.com, is authorized to fill orders for the free annual reports. Reports can be ordered online, by phone at 1-877-322-8228 or by mail. Ordering requires a name, address, Social Security number and date of birth, and sometimes a previous address and answers to verification questions.

The FTC warns about imitation sites that misspell the name or advertise free reports, scores or monitoring with strings attached, and notes that AnnualCreditReport.com and the bureaus will not email anyone asking for a Social Security number.

A free report usually does not come with a credit score. Section 609 of the Fair Credit Reporting Act (FCRA), the part of the law that gives consumers access to their files, says a bureau is not required to include credit scores in that disclosure. Scores are covered in a separate article, What goes into a credit score.

Section 1: personal information

The first section identifies the person the report is about. According to the CFPB, it can include names used, current and past addresses, date of birth, Social Security number and phone numbers.

This section is used to match information to the right person. It is not part of judging creditworthiness, but it still deserves a careful read. A misspelled name or an address where someone has never lived can be a sign that another person's information has been mixed into the file, or in some cases a sign of identity theft.

Section 2: credit accounts

The longest section usually lists credit accounts, sometimes called tradelines. Each entry describes one loan or line of credit. The CFPB lists the details a typical entry includes: the type of account, the credit limit or loan amount, the balance, the payment history, the dates the account was opened and closed, and the name of the creditor.

A few terms come up again and again in this section:

  • Account type. Revolving accounts, such as credit cards, let a person borrow up to a limit and carry a balance from month to month. Installment accounts, such as car loans, student loans and mortgages, are repaid in scheduled payments over a set term.
  • Responsibility. An entry often shows whether the person is the individual account holder, a joint holder or an authorized user on someone else's card.
  • Status. A short description such as open, closed, paid, current or past due.
  • Balance and limit. The amount owed as of the date the furnisher last reported, and the credit limit or original loan amount.
  • Payment history. Usually a grid or row of months, each marked as paid on time or late by a certain number of days, such as 30, 60 or 90.

The payment history grid is often the most detailed part of the whole report. A single late month stands out against a run of on-time months, which makes it straightforward to compare what the report shows with a person's own bank statements or payment confirmations.

Balances on a report are a snapshot. A furnisher typically reports once a month, so the balance shown may be from several weeks ago and may not match today's balance even when nothing is wrong.

Section 3: collection items

Some reports group collection accounts separately. The CFPB describes this part of the report as covering missed payments, accounts sent to collections and certain child support information. A collection entry usually names the collection agency, the original creditor and the amount the agency says is owed.

A debt can appear twice in a way that is legitimate: once as the original account, showing that it was charged off or transferred, and once as a collection account. Readers sometimes check whether the original account shows a zero balance once the debt has moved to a collector, so that the same money is not listed as owed in two places. The article Your rights when a debt collector calls covers collectors in more detail.

Section 4: public records

The CFPB lists liens, foreclosures, bankruptcies, civil suits and judgments as the kinds of public records a report may include.

Section 5: inquiries

The last section lists who has requested the report. The CFPB explains the difference between two kinds of inquiry:

  • Hard inquiries are usually made by lenders when someone applies for credit. Other businesses that buy the report can see them, and most scoring models consider how recently and how often a person has applied for credit.
  • Soft inquiries include account reviews by existing creditors, prescreened offers, employment screening and a person checking their own report. They are shown only to the person when they review their own report, and they do not affect credit scores.

Under Section 609 of the FCRA, the list of requesters generally covers the past year, or the past two years for reports obtained for employment purposes.

How long information stays

Section 605 of the FCRA sets time limits for most negative information. Accounts placed for collection, charged-off accounts and most other adverse items generally cannot be reported once they are more than seven years old. For collection and charged-off accounts, the law measures that period from 180 days after the delinquency began, so a later collection or sale of the debt does not restart it. Bankruptcies can be reported for up to ten years. Positive information, such as an account paid on time for years, has no such limit, which is why old accounts in good standing can stay on a report for a long time.

A simple way to read a report

Many people find it easier to read a report with a pen and a few documents at hand than to scroll through it quickly. One common approach is to go section by section:

  1. Check the personal information for names, addresses and other details that don't belong.
  2. Go through each account and ask whether it is recognizable, whether the status and balance look right and whether any late payments match the person's own records.
  3. Look at collection items and check whether each one is familiar, whether the amount looks right and whether the same debt appears more than once with a balance.
  4. Review public records and inquiries for anything unfamiliar.
  5. Compare the reports from all three bureaus, since each can differ.

Keeping notes as you go, with the bureau, the account and what looks wrong, makes it easier to come back to later.

When something looks wrong

The FCRA gives consumers the right to dispute information they believe is inaccurate or incomplete, with the bureau and with the business that supplied the information. When a bureau receives a dispute, Section 611 generally requires it to complete a reasonable reinvestigation within 30 days. The article Disputing credit report errors yourself explains how that process works and what a dispute generally needs to identify.

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