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A Cheat Sheet To Decode Your Credit Report

Your credit report is basically your financial resume—except you’re not the one putting it together. Your actions absolutely influence what shows up on the report. Still, it’s the credit bureaus (Equifax, Experian, and TransUnion) that tally everything in your report up and provide it to lenders who are trying to decide if they want to loan you money. 

Your credit score is of course, one piece of your credit report, but it’s not the whole thing. Keep reading to learn what’s in your credit report, how to get your credit report, and why being able to decode your credit report is the first step to building up your credit!  

What’s in A Credit Report?

Your credit report will usually have six sections. Let’s break them down!

#1. Your Personal Information 

Obviously, your credit report needs to identify you upfront. To that end, the first section of your credit report will include your:

  • Name
  • Social Security Number 
  • Date of Birth 
  • Address 
  • Phone Number 

This section might seem like a no-brainer, but it’s essential. You want to make sure that the information here is correct and if it isn’t, be sure to file a dispute or report to the credit bureaus to change or update it. 

#2. Employment History 

This information is usually there to help verify your identity (in addition to what’s in the personal information section). Sometimes it’s included in the personal information section. You can file a dispute to change incorrect information or update your history, but that’s not usually super necessary. 

#3. Consumer Statements

Remember those disputes we were talking about? They get logged in consumer statements. If you disputed something and the investigation didn’t resolve the issue, then a consumer statement might explain why you disagree with what happened. 

#4. Account Information 

In this section, you’ll find information specific to the credit accounts you have open. So, your mortgage, student loans, car loans, credit cards, etc., will all be included here. If you’re a renter, though, don’t worry when you don’t see your rent payments in this section. Those aren’t usually included in credit reports. 

What information is going to show up here? 

  • Your open accounts
  • Your closed accounts
  • The dates your accounts were opened or closed 
  • Your payment history 
  • Your credit utilization 
  • Your current account balance 
  • Your loan payment status 

It’s important to note that late payments can stay on your credit report for up to seven years (yes, seven years) before they’re removed from your credit report by the credit bureaus. 

You should watch for these errors in this section according to the Consumer Financial Protection Bureau:

  • Accounts belonging to someone else with the same name as you 
  • Accounts in your name that were created because of identity theft
  • An incorrect payment history 
  • A wrong listing of your balance or credit limit
  • Adding back of previously corrected data

#5. Public Records 

This section is going to include bankruptcies, foreclosures, tax liens, and civil rulings against you. Unfortunately, they can all hurt your credit. 

#6. Credit Applications

Ah, the credit application which leads to a hard credit inquiry. Too many of them, especially in a short period of time can negatively affect your credit score because it’s a signal that you’re spending more than you make and need credit to cover the difference. 

Hard inquiries happen when financial institutions check your credit after receiving an application for credit in your name. You’ll want to pay special attention here because if you see hard inquiries that you don’t recognize, your identity may have been compromised or stolen. 

Hard inquiries provide lenders with a timeline of when you’ve applied for credit. How long do hard inquiries stay on your credit report? On average, around two years, but they only tend to impact your credit score for one year. 

credit report

Codes on Your Credit Report 

You’ll probably see a lot of codes on your credit report. By “code” we mean an actual code, basically a combination of letters and numbers that stand for something.  It’s important to know that each credit bureau uses different codes, so don’t assume that seeing the same set code from report to report means the same thing. 

Here are guides to the codes from each credit bureau: 

How to Get Your Credit Report  

You can get a free copy of your credit report from each credit bureau once a year. To do so, you just request it from them online. 

Plus, if you don’t get approved for a credit application, you’re entitled to a free copy of your credit report from whatever bureau gave your report to the lender that denied your credit application. 

Why Does Any of This Matter?

Knowing how to decode your credit report is crucial because it will help you figure out how to build your credit best. You can get up close and personal with what may be holding your credit score back. 

Credit lenders, insurance agents, and landlords always pull your report when they’re evaluating your credit application. So, it’s important that you also have access to and understand what they’re reading. That way, you’ll be able to explain any mishaps in your report and advocate for yourself if you need to. 

You want to prove to lenders that you’re not a risky person to let borrow money. Knowing what’s in your credit report, disputing any issues, and being able to speak to your credit history will help you prove your creditworthiness so that you can get credit applications approved with ease. 

If credit applications are your weak spot or if you are interested in an easier way to build credit¹, we’ve got a solution (cough cough, use EXTRA).

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