November 1, 2011 Objective: Students will learn the components of a credit report.

Important Facts about Credit Reports There are three major credit-reporting agencies in the United States: Experian, TransUnion, Equifax You can get a free copy of your credit report once a year through

Understanding the Setup A credit report is divided into four sections: identifying information, credit history, public records, and inquiries.

Identifying Information What’s in this section: Information to identify you (address, birthdate, social security number, employer…) You may see name misspellings are variations this is okay because it means one of your creditors is reporting your information wrong. You want to look for glaring inaccuracies… addresses you’ve never lived at showing as current or past addresses, incorrect Social Security Number… this could be an indicator of fraud.

Credit History What’s in this section: Information about your individual accounts Each account will include the name of the creditor and account number (which may be scrambled for security purposes) Your credit history will also include: The kind of credit (installment, such as a mortgage or car loan, or revolving, such as a department store credit card). Whether the account is in your name alone or with another person. Total amount of the loan, high credit limit or highest balance on the card. How much you still owe. Fixed monthly payments or minimum monthly amount. Status of the account (open, inactive, closed, paid, etc.). How well you've paid the account.

Credit History Terms On Experian's report, your payment history is written in plain English -- never pays late, typically pays 30 days late, etc. Other comments might include internal collection and charged off or default. "Charged off means the creditor has given up… They’ve made efforts to collect and written it off." Other reports use payment codes ranging from 1 to 9; an R1 or I1 on a report is an indication of a good payment history on a revolving or installment account. 1 = Good then and as the number goes up it’s an indicator of negative payment history

Public Records What’s in the section: Bad Stuff… It doesn't list arrests and criminal activities; just financial-related data, such as bankruptcies, judgments and tax liens. Those are the monsters that will trash your credit faster than anything else. Public records, is the part you want to be absolutely blank. "If you have a public record on there, you've had a problem.”

Inquiries What’s in this section: "Any time anyone gets into the report, it'll post an inquiry,” Inquiries are divided into two sections. "Hard" inquiries are ones you initiate by filling out a credit application. "Soft" inquiries are from companies that want to send out promotional information to a pre-qualified group or current creditors who are monitoring your account. The soft inquiries are only shown on reports given to consumers, they don’t count against your score.

Too Many Inquiries You may have heard that a large number of inquiries can have a negative impact on your credit score, but you're probably OK. For instance, the FICO scores have at least a 30-day buffer period during which auto and mortgage inquiries are initially bypassed and not counted. It also counts two or more "hard" inquiries in the same 14-day period as just one inquiry. A lender can choose to ignore the score and focus on the inquiries though if they have concerns.

Fixing Mistakes If you find a mistake on your credit report -- an account that isn't yours or a disputed amount -- you'll need to fill out the form that comes with the report, or follow the instructions on the explanatory sheet. The process takes time because the creditors have 30 days to respond to a charge of a discrepancy. As long as a charge is in dispute, that dispute will show up on your report. Long-time lenders say it's common for reports to have errors. Some estimate that as many as 80 percent of all credit reports have some kind of misinformation.