Debt Consolidation Counseling | Bad Credit Debt Consolidation

Getting hold of your credit report is one thing, but understanding its contents thoroughly is another.  Your credit report contains a variety of details, from your personal identification to recent inquiries from a variety of lenders.  Whether you need to examine your credit statements for loan purposes or to make the needed credit repairs, understanding your credit report and the information included therein is of high importance.

What’s a credit report?

A credit report is a statement that records your borrowing and repaying history.  Credit accounts are typically included here, with a list of the accounts you have made with lenders.  Your loan amount, credit limit, outstanding balances are also listed, including the date that you opened each account with your respective lenders.  This report also contains information about any late payment you may had in the past, as well as any record of bankruptcy.

Credit reports come from a consumer reporting agency, or a CRA.  A credit bureau is one consumer reporting agency that gathers information regarding your credit activities.  These bureaus acquire information from your creditors or lenders and store such information in their databases.  The information in your credit report is being updated regularly to reflect the most recent records.

As much as your credit report reflects your credit activities, there are certain types of information it does not include.  This report will not show any detail regarding your checking accounts or savings accounts, for instance.  Any bankruptcy record older than 10 years will also be omitted.  Certain personal details such as religion, political affiliations, and ethnicity are also not included in your credit report.

Although your credit report is considered a requirement by most lenders, it is also open for viewing by potential employers, landlords, insurance companies, and even some government agencies.  As long as an individual or company has an acceptable purpose, they are allowed to look at your credit report.

What are the basic parts of a credit report?

Different credit reporting agencies may use different formats in their issued credit reports; however, the types of information included therein are essentially the same.  Your credit report will show four types of information, which are organized into different sections.  These are your identifying information, credit history or trade lines, credit inquiries, and public records.

The identifying information section lists relevant information to identify you.  Your complete name, residential address, date of birth, Social Security number, telephone number, and employment facts are all enumerated in this section.  Your employment status, current employer, and previous employers are also included here.

The next section discloses your trade lines or credit accounts.  Since this section reveals your credit history, it is one of the more important parts of your credit report.  This is where the lenders provide information on the accounts you have opened with them.  The type of accounts can range from simple credit cards to auto loans and mortgages.  Lenders will indicate which  type of account you have opened with them, the date when you opened the account, the credit limit, as well as the loan amount you have obtained, payment history, and the outstanding balance on your accounts, if any.  You may have more than one account from the same lender.  The account numbers, which correspond to each account, are also indicated, although they may be scrambled for purposes of security.

Your credit report also lists any credit inquiry made into your credit history by another party, such as lenders, potential employers, insurance companies, and government agencies.  However, only those inquiries done for the past two years will be included in your credit report.

Finally, your credit report will also contain public records, which are essentially financially-related.  The information included here is typically obtained from government sources.  Bankruptcies, judgments, tax liens, and even unpaid child support for the last seven or 10 years are itemized in this section.  Ideally, you would want this section to be blank.  The public records section can affect your credit rating as much as your actual credit histories.

All the information listed here is obtained by the credit bureaus from your creditors and lenders.  In the event that any entry has been erroneously reflected, you can always make a dispute on your credit report by communicating with the issuing credit bureau.

How can you dispute wrong or outdated information on your credit report?

Once you have obtained your credit report and you discovered that there are incorrect and outdated information included in your statement, you need to file a dispute to correct the erroneous information as soon as possible.  In the United States, there are three major credit bureaus that issue credit reports.  Make sure that you obtain all three, so you will know which credit bureau has made some wrong entries.

Writing a dispute letter to the concerned credit bureau should be done without delay.  It is important to be specific about your dispute.  You may have to wait for 30 to 45 days before you will receive a reply.  After the credit bureau has already made verifications with your lenders, any erroneous information will be deleted from your report.

If the credit bureau has taken more than 30 days to answer your dispute, you can send them a demand letter.  Attach a copy of the original dispute letter to your demand letter as proof.  It is important for the credit bureau to remove the erroneous item immediately once the 30-day investigation is up.  Taking care of any incorrect credit report information promptly will improve your credit rating tremendously.

Your credit report speaks significantly about your credit history as well as your character as a debtor.  This report is normally required whenever you apply for a new loan, seek employment opportunities, and even when you are looking for a property to lease.  By thoroughly understanding your credit report, it will be easier for you to spot any incorrect information and dispute it afterwards.  This will allow you to enjoy a much higher credit score and a healthier financial record all in all.