Reading a credit report can be a little bit daunting, but it’s an important part of managing your credit and ensuring that your credit score is accurate.
A person’s credit worthiness can affect their financial health in positive and negative ways. Knowing how to read a credit report and understand its impact on your financial health requires several steps.
Here are seven tips for reading your credit report:
- Get a copy of your credit report. You are entitled to a free copy of your credit report once a year from each of the three major credit bureaus: Equifax, Experian, and TransUnion. You can request your report online, by phone or by mail.
- Review your personal information. Check your name, address, Social Security number and date of birth to make sure they are correct. If you find any errors, contact the credit bureau to have them corrected.
- Check your credit accounts. Look for all your credit accounts, including credit cards, loans and mortgages. Make sure the information about each account is accurate, including the balance, payment history and status of the account.
- Check for errors. Look for errors or inaccuracies on your credit report. This could include accounts that you don’t recognize, late payments that you know you made on time, or incorrect personal information.
- Check your credit score. Your credit report will include your credit score, which is a three-digit number that is used by lenders to determine your creditworthiness. Make sure that your credit score is accurate and that it reflects your credit history.
- Dispute errors. If you find errors or inaccuracies on your credit report, you can dispute them with the credit bureau. Each credit bureau has its own process for disputing errors, but you can generally dispute errors online, by phone or by mail.
- Monitor your credit report. It’s a good idea to check your credit report regularly to make sure that there are no new errors or inaccuracies. You can also sign up for credit monitoring services, which will alert you if there are any changes to your credit report.
“Reading your credit report can be a little overwhelming, but it’s an important part of managing your credit and ensuring that your credit score is accurate,” said Patrick Hart, certified financial planner with Concierge Capital Management.
By following the above steps, you can ensure your credit report is up to date and free of errors.