How to Read a Free Credit Report

So you have made the important decision of obtaining a credit report from a credit agency, good for you! You have made a very wise financial decision, and now you are about to make yet another, you're going to learn how to read it, you're on a roll. Learning how to read your free credit report is vital in making the most of the supplied credit information and figuring out where your credit stands in the eyes of potential lenders.

Firstly, you should know that there are three major credit reporting agencies in the USA: Equifax, Experian, and TransUnion. The Federal Trade Commission requires all three of these major national credit reporting companies to provide consumers with a free credit report if requested, once every 12 months. This is the same information that is provided to lenders and credit card companies when you apply for their services, so it is essential that you know what is on your credit report before they carry out a credit check on you. Things such as fraud, identity theft, and otherwise inaccurate information commonly occur on credit reports without the victim's knowledge, negatively effecting their chance of receiving a loan, lease, or credit card.

Don't worry, reading a free credit report is actually quite simple!

Free credit checks generally consist of five main parts:

1. Personal Information, such as your name, social security number, address, phone number, etc.

2. Public Records Information, such as previously filing for bankruptcy, civil judgments, etc.

3. Collection Agencies Information. Any bad debts that you have held, which have, as a result, been passed on to a collection agency will show up here.

4. Open Accounts, such as current credit cards, utility accounts, loans, leases, etc.

5. Credit Inquiries. A list of previous inquiries from lenders and other companies who have requested your credit report.

Be sure to throughly check all five of these sections to ensure that all the supplied information is correct and up to date. If you do find any incorrect information on your free online credit report, immediately contact the responsible credit agency and bring it to their attention, the sooner you do this the better, as it may take several weeks for the corrections to be processed.