Understanding Your Credit Report Line by Line

Your credit report is the raw data your credit score is built from — and a surprising number of people have never actually read theirs. That's worth fixing, because errors in it can cost you money you had no part in creating.

What's in it

A credit report generally contains four kinds of information.

Identifying information — name, addresses, date of birth, and similar. Not used to score you, but worth checking, because errors here can signal that someone else's data has been mixed into your file.

Credit accounts — each credit card, loan, and line of credit, with the balance, limit, and crucially your payment record over time. This is the bulk of it, and it's what feeds the payment history and amounts owed factors that dominate your score.

Credit inquiries — who has checked your credit. Hard inquiries from applications can slightly affect your score; soft inquiries from your own checks don't.

Public records and collections — bankruptcies and accounts sent to collections, which carry significant negative weight.

Why check it regularly

Two reasons. First, errors are more common than people expect — an account that isn't yours, a payment marked late that you made on time, a debt that should have dropped off. Each can drag your score down silently.

Second, it's the earliest way to catch identity theft. An account you don't recognise is often the first visible sign someone is using your identity.

What to look for

Accounts you don't recognise. Payments marked late that you're sure were on time. Balances that look wrong. Negative items older than they're permitted to be reported. Duplicate listings of the same debt.

Fixing errors

If you find a genuine error, you have the right to dispute it with the bureau, which must investigate. Document everything, be specific about what's wrong, and keep records of the exchange. Correcting a real error is one of the few ways to improve a score that reflects fixing an injustice rather than changing your behaviour.

The access point

In the US you're entitled to free reports from the major bureaus, and checking your own report is a soft inquiry that never affects your score.

Other countries have their own bureaus and access rights — the principle of checking regularly holds everywhere, even though the mechanics differ.

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References

• What's in my FICO Scores? — myFICO
• What Affects Your Credit Scores? — Experian
• FICO Score Meaning: How It Works — NerdWallet

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This article is for general information only and is not financial or legal advice. Credit reporting systems, access rights, and dispute procedures differ significantly by country. In the US, verify your rights at the CFPB or AnnualCreditReport.com; elsewhere, check your national credit bureau.