Making Sense of Your Credit Report

You've pulled a copy of your credit report and are now looking at a tangle of information. You see your last three addresses, a long list of businesses that have checked your report, and dozens of credit accounts. But what does it all mean? Which information should you look at first? Here's a quick rundown of your credit report and the key information on it:

Why should I care about my credit report anyway?
A credit report is a factual record of your payment history and other credit-related items that lenders use to help determine whether to grant you credit. The information on your report is compiled by the credit bureaus, which regularly receive data on whether you make payments on time and how much you owe. Since creditors are constantly reporting new information to the bureaus, your credit report is always changing.

If you don't have a credit report handy, you can get a FREE copy of your report by clicking here. Along with your report, you'll receive a 7-day Privacy Matters 123 trial.

What should I be looking for?
In a word, inaccuracies. Mistakes are not entirely uncommon on credit reports. Sometimes they're caused by simple human error, other times they occur when credit files of people with similar names are inadvertently mixed. Increasingly, unfamiliar or inaccurate information can also be an indicator of identity fraud - when someone uses your name and accounts without your knowledge. Look closely at the following areas to catch mistakes or fraud:

Personal Information - Are the names and addresses listed on your report accurate? Often, an incorrect address or unfamiliar suffix, such as Jr. or Sr., can be an indication that your file may have been mixed with that of another person. Additionally, a recent address change may indicate that someone is fraudulently opening accounts in your name, but routing the bills to their address.

• Public Records - If any bankruptcies, judgments or liens are listed in this section, make sure they are accurate and complete. Remember, some bankruptcies can stay on your report for up to ten years while others cycle off after seven years.
• Accounts - You will notice basic information such as your credit limit, current balance, and date the account was opened. Also check out the detailed payment information by month for incorrect late payments or charge-offs.
• Remember to check for unfamiliar accounts or activity on accounts that you thought were closed. Someone besides you could be using the account.
• Inquiries - This section shows you who has received information from your credit report and who was given your name during the recent past, as allowed by law. Often, credit grantors will "pre-screen" your credit file in order to offer you special rates. Additionally, inquiries are recorded when you apply for new credit or authorize an employer or insurance company to check your credit history.

What Next?
If everything looks accurate, then you can breathe easy. Just remember to regularly monitor your credit to make sure everything stays accurate.

If you find a mistake, then you have the right to dispute the information free of charge. You should contact the credit bureau that provided the information and dispute the inaccurate information. You can also contact the creditor and ask that new, accurate information be provided to the credit bureau.

Finally, if you suspect fraud, contact the credit bureaus immediately and place a fraud alert on your report. Then, contact your credit card companies and bank to protect your accounts. Click here to check out additional fraud tips.