How to Read Your Credit Report

As everyone is entitled to a free credit report once each year by the Fair Credit Reporting Act, it is important to know how to read the credit report to get a better understanding of their particular financial situation. It is also important to pull all three credit reports each year because though much of the information may be the same from report to report, there are differences on each report which can substantially affect the credit score. The information is different because the reporting system is completely voluntary and all creditors may choose which of the three, if not all of them, to report data to. The typical credit report is divided into four major parts: identifying information, credit history, public records, and inquiries. 

Identifying Information

This is the information that identifies the consumer. Information such as name, address, date of birth, and social security number will be located here. It may also include employer information or the spouse’s name. Any inaccuracies will remain on the report to ensure the link stays correct because these inaccuracies are a result of misreported data. 

Credit History

This is the meat of the report and will contain information about all the accounts the consumer has, whether open or closed. Information will include the account type, the balance, the limit, the date opened, and the payment history. It will include accounts in collections and information on the original creditor. It will include the account status, whether it is a joint or single account, and will likely include the account numbers. Some account numbers may be protected with special characters for security purposes. There may be numbers used to indicate the status of the account and its payment history, such as R1-11. If “charge off” is by the account, it means the account has been sent to collections because the creditor has given up on getting the money from the consumer. 

Public Records

This section will contain financial data such as bankruptcies, judgments and liens. In most cases, this section of the report is blank, and if not, this section will do the most damage to the credit score. Consumers who see information here should take immediate steps to clear this information from the report. 


This section of the report shows a list of the agencies that have pulled credit information for the purpose of a loan, credit card application, promotional offer, or employment purposes. It will list different types of inquires. Those that were initiated by the consumer are considered “hard” and the ones initiated by a company for a promotional purpose are considered “soft.” Though inquires will impact the score, they are not a large part of the scoring model and will not have a major impact on the overall score. 

Rather than having someone who works at a bank pull the report on your behalf, it is important to pull the report directly from the credit bureau or through the annual website. Not only is your report more consumer friendly, but it will also contain more information. When you pull your own credit, your score is not affected.

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