How to Read Your Credit Report— 5 Top Things to Watch For and Get Fixed ASAP

Understanding your credit report is critical Image Source - Flickr User Tony Webster
Understanding your credit report is critical
Image Source - Flickr User Tony Webster

Most people are concerned with their credit score and focus strictly on the three-digit number, but there is far more to your credit profile than just the math that drives that number. It’s also important not to confuse your credit report with your credit score. The score is based on information on your report, so you have to start with your report to improve your credit score. Here’s what to look for and fix.

#1 Public Records

One of the most important sections of your credit report is the public records section. This is where you will see if you have been sued, if there are any judgments against you, or any liens. This is important information. Filing bankruptcy may help wipe out some of these issues.
It’s important to know what public records exist on you related to your debts so that you can approach them practically and ensure you don’t end up with liens on your home or other assets. If you do find public records, these should be addressed as soon as you can.

#2 Adverse Accounts

This section contains accounts that are in collection or severely delinquent. These are items that, if they are not addressed via debt settlement or bankruptcy, could lead to public records and a lien on your home or bank account. These are seriously overdue debts.
If the debts are unsecured debts like credit cards and medical bills, they can be wiped out in bankruptcy. This is also where debt collectors will add an item onto your credit report if they have been retained to collect a debt, meaning you can have two items on your report for one debt.

#3 Unknown Accounts

Below the adverse accounts section is a list of your other accounts that are in good standing. It’s good to check this to make sure that the balances due agree with your own record keeping and that your completed payments are on display, but this is also an area to check for fraud.
Look for accounts that are unknown to you—this can indicate that someone has opened an unauthorized account in your name due to identity theft. It will start in this section and then move into adverse accounts once the fraudster runs up debt and fails to pay.

#4 Unknown Inquiries

This section is where identity theft may first be detected. Someone trying to use your identity to get credit will trigger an inquiry when they apply for the credit. If you see any inquiries you don’t recognize, you should follow up on them.
Pre-approved offers and other soft credit checks should not trigger an inquiry. The only inquiries you should see is for credit you applied for—nothing else. You can also freeze your credit report if you see illegitimate inquiries to ensure no more credit accounts are opened.

#5 Inaccurate information

Other info on your credit report includes your name, social security number, address, employment information, other names used, and all your credit accounts. You should go through all of this information to look for inconsistency and inaccuracies.
If you find anything incorrect, you can request that it be fixed. However, you may have to provide documentation, such as proof of an address change, to substantiate what you’re trying to get changed. Once your report is clear and correct, you can lock it, then only unlock it when you seek new credit.

Always pull all three reports and check them regularly

One thing to know is that just pulling one of the three full credit bureau reports is not enough. Often, each report will contain different information. Request all three, go through them thoroughly, make all the corrections that need to be made, and then go into maintenance mode.
That means you should check all three reports at least twice a year, and you may want to sign up for a monitoring service so that anytime your credit reports change, you’ll be notified. This can alert you early on to an error or identity theft so you can protect your credit.
To find out more about improving your credit score after bankruptcy, contact Credit Score Keys. We help North Carolina bankruptcy filers rebuild their credit and get back on the road to financial success. Call 919-495-2365 to get started today.