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WEALTH STARTER PACK

Understanding Your Credit Report

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Types of Accounts:
  • Real Estate Accounts = Mortgages & other property loans (primary & secondary)
  • Installment Accounts = Accounts with set payment schedules
  • Revolving Accounts = Credit cards & other accounts that allow you to make additional purchases without reapplying for a new loan
  • Collection Accounts = Accounts that are seriously overdue & may have been turned over to a collection agent

Report Terms:

  • Count = # of accounts in each category
  • Balance ($) = the total of all outstanding balances on the accounts within that category
  • Payment ($) = the sum of all current minimum payments due at the time your report was pulled
  • Current = # of accounts that have been paid on time within that category
  • Delinquent = # of accounts that are past due
  • Other = all other accounts not included in the given categories
  • Open Accounts = total # of accounts open in your name
  • Closed Accounts = total # of accounts that have been terminated
  • Public Records = # of federal district bankruptcy records, state & county court records, tax liens and monetary judgments in your name
  • Inquiries = # of times your credit file has been requested by a creditor in the past 6 months

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Public Records

This information comes from federal district bankruptcy records, wage items, state & county court records, tax liens and monetary judgments, and, in some states, overdue child support records

  • Public records remain on your credit report for 7-10 years.

Report Terms:

  • Type = type of public record (bankruptcy, tax lien, etc.)
  • Date Filed = date your record was created
  • Reference # = your record’s legal identifying number
  • Court = the court that has legal jurisdiction over your record
  • Plaintiff = the person or company listed in the legal judgment
  • Liability = $ amount for which the court decided you are legally responsible
  • Asset Amount = $ amount of total personal assets taken into account in making the court decision

Credit Inquiries

This section contains the names of those who have obtained a copy of your credit report.

  • Anytime your credit report is pulled – whether you apply for a loan and the lender requests a copy of your report, or you order a copy of your credit report yourself directly from the credit bureau – an inquiry is added to your report
  • There are 2 types of inquiries:
    • Hard Inquiry = these are inquiries made by your creditors and lenders with whom you have applied for credit or a loan. When lenders order a copy of your credit report, they see only the inquiries made by other creditors and lenders with whom you applied for credit or a loan. Also, these are the only inquiries that are considered when calculating your credit rating and/or credit score.
    • Soft Inquiry = these are made when you request your own copy of your report and/or when an employer checks out your credit history. Lenders and creditors do not see these inquiries when they pull your credit report; therefore, they do not use these inquiries to calculate your credit score and/or make loan decisions.
  • Try to limit the number of hard inquiries placed on your report – lenders often consider a high number of inquiries as a sign of financial difficulty.
  • Inquiries remain on your report for up to 2 years.
  • Look for hard inquiries from companies you are unfamiliar with or did not authorize to check your credit report; these could signify credit fraud.
  • NOTE: Your credit was not affected when ConsumerInfo.com, Inc., an Experian company, (“ConsumerInfo”) pulled your credit report for you because this is a soft inquiry.
  • Information is listed as follows:
    • Name of the person or company making the inquiry
    • Reason for the inquiry or company’s type of business
    • Date your credit report was requested by the company

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Account History

This section includes specific information on each account you’ve opened in the past.

  • Positive information about your accounts remains on your report indefinitely.
  • Check to see that all information is accurate & consistent.
  • Look for accounts you don’t recognize – these could be accounts that were fraudulently opened in your name.

Here are a few sample credit reports: Equifax, Experian, myFICO. These samples are especially helpful when you order your credit report from one of those three providers

QUESTIONS?