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Understanding Your Credit Report and the Credit Bureaus

Understanding Your Credit Report and the Credit BureausYour credit report is actually more complicated than it may appear at first glance, simply because you are actually dealing with reports from the three different agencies, TransUnion, Experian and Equifax. What this means is that you will need to check each of the three reports on a regular basis to ensure you have all the pertinent information on your current credit score.

Anatomy of a credit report

While three major credit reports are going to vary somewhat, information is always going to be grouped into four major categories, there are credit inquiries, creditor information, public record information and personal information.

Personal information: The personal information section is going to include things like your name any aliases you use, your social security number, date of birth, employment information and your current and previous addresses. 

Public record information: This section will include any currently pending legal issues related to your current financial situation. This can include bankruptcies, wage garnishments, judgments and liens. A TransUnion report will also show the approximate date when these details will be removed from your report. 

Creditor information: This section will show all of your debts that have been turned over to a collection agency and all of the liens of credit that you currently have. Additionally, you will find details outlining the status of the account in question, if you share responsibility of any of the accounts, your current balance, payment history, credit limit and if the account is currently past due. Typically, positive and negative accounts will be grouped together. 

If you have accounts that are negatively affecting your credit, it is important to keep in mind that you can dispute any of these issues with the credit reporting company. Barring that they will fall off your report after the issues has been resolved for seven years. 

Each of your accounts can be classified in the following ways: if any of your accounts are listing as charged off, that means that the account has been written off from the creditor as a loss. While this means that you may not have to pay off the account, it will still show up on your credit report for seven years. A revolving account is the classification given to credit cards, you don't need to pay these in full each month and can instead revolve them and just pay the interest. 

An installment account is the classification given to loans or other accounts that involved fixed payments .An open account is the classification given to accounts that force your to pay the total balance off each month. A collection amount is the classification given to any account that has been transferred to a debt collection agency, this will even show on accounts that you have settled the debt for in the past seven years. 

Credit inquiries: This section of your credit report includes a list of every agency that has reviewed your credit report in the past seven years. There are two different types of inquiries, hard inquiries are made by lenders when you apply for a line of credit, too many of these in a seven-year period can negatively impact your credit score. Soft inquiries are made by you or agencies that pre-approve you for lines of credit. 

Credit report codes: The following is a list of codes you may see on your credit report and what they mean.

CURR ACCT: This means that account is in good standing and current:
CURR WAS 30-2: This means that account is currently in good standing but has been late by 30 days or more at least twice. 
PAID: This means the account is currently inactive and has been paid off.
CHARGEOFF: The means that account has been charged off. 
COLLECT: This means the account has been sent to collections.
BKLIQREQ: This means the debt has been forgiven due to bankruptcy. 
DELINQ 60: This means that account is at least 60 days past due. 

How To Get All Your Reports For Free Online 

Every singe American citizen is entitled to one free copy of each of their credit reports every twelve months. The Fair Credit Reporting Act (FCRA) means that TransUnion, Experian and Equifax are obligated to provide you with these details, but only if you ask for them. The FCRA promotes the privacy and accuracy of the information from these credit reporting agencies and is enforced by the Federal Trade Commission.

To order your free reports, all you have to do is visit AnnualCreditReport.com, fill out an Annual Credit Request Form (available at Consumer.FTC.gov) and mail it to Annual Credit Request Service, P.O. Box 105281, Atlanta, GA 30348-5281 or call 1-877-322-8228.

Assuming you visit the website, you will be sent to a form page where you will be required to include pertinent identifying information including your date of birth, social security number, address and name. If you have moved within the previous two years you will likely need to provide your previous address as well. Once you submit these details you will then be taken to a page that will allow you to select the reports you wish to receive, you can choose to get all three at once or get them one at a time, it doesn't matter as long as you haven't received them in the previous 12 months.

You will then be taken to a page that will further help to verify your identity. You will receive a list of questions about the terms of your loans, your current creditors, and the like, that only you are likely to know. You will need to answer all the questions correctly which means you may need to have your current bill and loan statements handy. 

There are pros and cons to pulling all three reports at once or waiting and spacing them out. If you decide to get your reports once at a time then you can space them out throughout the year, one every four months, so that you will always be aware when something new affects your credit, negatively or positively. The downside is that if there is something negative on one of your credit reports and not the others, then you will have to wait a full year to find out about it. 

One the other hand, pulling all three of your credit reports at the same time will allow you to pinpoint any issues right away which means you can start working toward a solution for them as soon as possible. Additionally, this method will allow you to determine what the differences between the various reports are and if there are any discrepancies that can be easily resolved such as one of them not showing that you have finished paying off a loan. The downside is, of course, that if something happens to your credit in the next eleven months you won't know about it until the time comes to pull all three again. To mitigate this fact, you can sign up with a credit monitoring service, which will keep tabs on your credit for you in between the periods where you are eligible for a free copy of your various reports. 

Be aware of impostors  

While AnnualCreditReport.com is the only legitimate way to pull your credit reports on a regular basis for free, that doesn't mean it is the only site out there offering this service. While these other sites might have offers for free services, they likely come with strings attached, at best, or are simply scams designed to steal your personal information, at worst. Especially be aware of sites whose URLs are misspellings of AnnualCreditReport.com as it is unlikely that they have anything remotely close to benign intentions in mind. 

Additionally, you are going to want to keep in mind that AnnualCreditReport.com verifies all of your information directly on the site which means that if you receive an email claiming to be from this site then it is likely a form of phishing that is trying to steal your personal information. Likewise, the three major credit reporting agencies never contact individuals directly which means if you receive a phone call or email from someone claiming to be with either TransUnion, Experian or Equifax then the safest choice is just to ignore it. 


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