How to Read Your Credit Report

It is important to annually check your credit report to make sure it is accurate and up to date. It affects your personal financial accounts and loan rates when you’re ready to make a large purchase. Yes, reading your credit report can be confusing. No, you’re not the only one.

We’re here to break down the credit report to make it easier for you to read and understand what's really going on.

A credit report is made up of different sections, however most of the information is divided into 4 main categories:

Personal information
Public record information
Creditor information
Credit inquiries

Personal Information

This section is straightforward. It includes all of your personal information

Your name and aliases
Social security number
Date of birth
Employment data
Current address
Previous address

2. Public record information

This section will cover any open legal issues that will be related to your financial information. This might cover:

Bankruptcies
Liens
Judgments
Wage garnishments

3. Creditor Information

This section will be the largest part of the credit report. All existing lines of credit will be included in this section, positive accounts and adverse accounts which is divided.

Each account section tells you:

The status of the account: Current/open, closed, charged-off (sent to collections)
The responsibility of the account: Joint or individual
Your account balance
Your most recent payment
Past due information, if applicable
Your credit limit

3A. Adverse accounts - possibly negative accounts

This section will have any accounts that hurts your credit. It includes any late payment, outstanding balances, or accounts that may have sent to a collection agency. You are able to dispute any of the accounts in this section. However, these adverse accounts will be removed from your report after seven years.

3B. Positive Accounts

Accounts that have been paid in full and on time.

Terms that will be helpful when reading your credit report written by Kristin Wong from Two Cents Life Hacker.

Charge-off, Payment after charge-off: If the status of your account is "charged-off," this essentially means the creditor has given up on you, charging the amount off as a loss. Usually, they've sent your debt to collections. If you made a payment after a charge-off, it won't be removed from your account.
Revolving account: If your account type is revolving, it's likely a credit card. These are accounts that you don't have to pay in full every month. You have the option to revolve your credit and pay interest on the amount you revolve.

Installment account: Usually loans. These are accounts with fixed payments over a fixed time period.
Open account: These are less common to see on your credit report. They're accounts that require you to pay the balance in full each month. A utilities company, for example.
Collection account: If an account has been transferred to a third party collection agency, that credit shows up as a collection account, even if you've settled the amount.

4. Creditor Inquiries

This section will show any individuals or businesses who has pulled and taken a look at your credit report. For example, a bank or a mortgage lender if you’re applying for a home loan.

Codes to know

CURR ACCT: Account is current, in good standing
CUR WAS 30-2: Account is current but was 30 days late twice
PAID: Account balance paid off, inactive
CHARGOFF: Unpaid balance charged off, credit grantor no longer seeking balance (likely has been sent to collections)
COLLECT: Account is seriously past due and has been sent to collections
FORECLOS: Property was foreclosed
BKLIQREQ: Debt forgiven via Chapter 7, 11 or 13
DELINQ 60: Account 60 days past due