Skip to Content

Granite State Management and Resources LinkedIn button

Reading Your Credit Report

Are you trying to build credit for the first time, or perhaps re-build your credit standing after going through some financial difficulties? The only way to build a credit history is to use credit. The key to building good credit is to use credit wisely. Whenever you submit an application for a loan, insurance or credit card, new information is added to your credit report. If you have little or no credit history, you can build credit responsibly over time. Your credit score, a three-digit number that indicates a borrower's ability to repay a loan, indicates to a lender or creditor the level of risk it will have to accept. It quantifies your credit risk. Credit scores are based on detail from your credit reports. Creditors will use your credit history to reject or accept a loan, or may determine the loan interest rate. The higher your score, the less risk for the company offering you credit.

Individuals who feel that their credit score is incorrect should look for inaccuracies in their credit report. You can correct erroneous information in a credit report that results from misinformation or identity theft by disputing your credit report.

Of course, to look for inaccuracies, you need to understand how to read a credit report. One of the three major credit reporting agencies, TransUnion, offers a Credit Report Training Guide. The guide includes a sample credit report with generic information to illustrate the information, messages and summary you will find on your own report.

Sections of your credit report include:

Identifying Information. This section will contain the consumer’s general information such as name, address, past and current, and telephone numbers. You may also find names of employers and the driving license located in this section. It is important for consumers to read this section over carefully and make sure all information is accurate. There may be some discrepancies such as a misspelling of the consumer’s name or a wrong telephone number, such mistakes are fine and to be expected even yet consumers will want to call the agency and report the mistake.

Credit History. A portion of the report will contain the bulk of the information that potential lenders, employers, and others that require a credit report will look at to determine if the consumer represents a high risk or is eligible for whatever benefit or job they are applying for. This section will include the name of the creditor along with the account number. It is possible that the consumer will have multiple account numbers from one creditor. Other information will include the date the account was opened, the kind of credit, along with the total amount of the loan, and how much is still owned on the loans.

Public Records. If you have any financial data such as tax liens and bankruptcies, this is where you will see it appear. If there is a mistake in this section, you should immediately contact the collection agency listed and inquire about the mistake. It could simply belong to someone with a similar social security number or name or can be a sign of identity theft.

Credit Summary. The last section lists the names of the companies who have requested to see your report and information.