What To Look For On Your Credit Report

When you receive your free credit reports, check each section carefully and determine whether you believe the information is correct. Your credit report could alert you to fraudulent activity being carried on in your name by an ID thief or other inaccurate information that could affect your ability to obtain a loan.

A 2004 survey found that 79 percent of credit reports contain some kind of error. Nearly a third listed accounts the owner had closed as remaining open.Check to make sure your name, address, and employment history are all correct. Make sure a relative's credit history is not being reported as yours. Also look to see that each credit card account listed belongs to you. Information which is erroneous, outdated, or irrelevant should be removed or corrected.

In particular, be sure to review:

Incorrect names and addresses;
Accounts that don't belong to you;
Accounts incorrectly listed as open or delinquent; and
Bankruptcies or other judgments that don't belong to you.

Incorrect or missing positive information on credit reports can make a consumer appear less credit worthy, lowering his or her credit score. Errors can lower a consumer’s score in situations such as when incorrect information or mixed files add the credit history of others to a consumer’s report. Unreported positive credit information can lower a consumer’s score when the record does not contain full and accurate information regarding existing accounts paid as agreed.

What to check in each section of your credit report

Before your go in detail, have the credit agency legend by your side in order to verify coding compliance. Have also a paper and pencil to annotate any item you find in error. Go slowly! Here are eight items to check that have caused problems for others:

1. Identitying information

It's important to make sure that your identifying information is accurate. You could be viewing information from someone else's report with just a simple error such as: first name misspelled, missing Jr./Sr., erroneous address, bad zip code, wrong employer, or any other incorrect personal data. Insure marital information is correct.

full name
social security number
date of birth
current and previous addresses
marital status
employers

2. Credit accounts

Look for any accounts you didn’t open. Make sure that they truly belong to you and not a family member, someone at the same address or someone with the same name. Look for balances on your legitimate accounts that are higher than you expect.

Closed accounts should not be listed as open. Accounts you closed should reflect "closed by consumer". Otherwise it can be assumed that it was closed by the creditor-- not good. Accounts should not appear twice even in different sections.

Incorrect histories such as late payments, a credit entry you do not recognize, a pre-marital debt of your current spouse, or other such items need your attention. Are there missing reports that would be beneficial to show a good history, and are profiles, credit limits, and balances correct?

accounts
delinquencies
late payments, charge-offs, or other negative entries
debts

3. Inquiries

Look for Inquiries or requests for your credit history that you didn’t make. There are two types of inquiries. “Regular” or “hard” inquiries are the ones that result when you apply for credit or when an account is transferred to a collection agency. Examine the list for companies you don't recognize. If you have a lot of inquiries that you aren't familiar with, that could be a sign someone is trying to open accounts in your name.

The other type, “promotional” or “soft” inquiries, would not be an indication of problems. This type includes pre-approved credit offers, checks for employment purposes, account monitoring by your existing creditors and your own requests for your report.

credit inquiries
hard inquiries that you didn't authorize

4. Collections and public records

First of all, make sure they are all yours. Bankruptcies can remain on your credit report for 10 years; other negative data can remain for seven years. If you spot something older, have it removed.

bankruptcies
lawsuits, judgments, foreclosures, garnishments, or tax liens
duplicate collections