Credit
reporting agencies maintain financial records of your accounts as well as
any inquiries or requests for information on your account from potential lenders
and employers. Trying to read your
credit report and make sense of it may be a little challenging. Keep a copy of this guide to help you interpret
what everything means when you read your credit report.
What
types of accounts are listed?
You
will see one or more of the following:
O
= Open (The entire balance is due at the end of each month)
R
= Revolving (The payment amount is variable, you will usually have a minimum
payment due of 2% of your outstanding balance)
I
= Installment (A fixed number of payments.
An example of this would be a car loan or lease)
Timeliness
of your payments
0
= The account is approved but not used or too new to rate
1
= Payments are paid as agreed
2
= 30 days or more late
3
= 60 days or more late
4
= 90 days or more late
5
= Pays or paid 120 days or more late; or account is in collections
7
= Making regular payments under wage earner plan or similar arrangement
8
= Repossession
9
= Charge off
Whose
account? (Who is responsible for the account and how
do you participate?)
J
= Joint
S
= Shared
M
= Maker
A
= Authorized User
T
= Terminated
I
= Individual
U
= Undesignated
C
= Co-maker/Co-signer
B
= On behalf of someone else
Correcting
errors that you may find on your credit report.
If
you discover information on your account that you believe is false, you must
write a letter explaining the error to the credit bureau that you received
the report from. Remember, there are
3 credit bureaus (Experian, Equifax, and Trans Union) and when you request
a copy of your credit report, you should request a copy form all three bureaus. Compare the three line by line to ensure that
not only the information matches, but that it is also correct.
After
you have submitted your written statement to the credit bureau disputing the
error, the bureau in turn will contact the creditor whose reporting is in
question for validation of the information.
The creditor will modify your credit report with the credit bureau. If the creditor is unable to verify the information,
the information must be removed from your credit report.
Since credit account information remains on your credit report for at least seven years, it is extremely important to view your report form all three bureaus at least once a year to ensure what is being said about you is correct.