Learning About Credit History Report Information

It is important for consumers to be knowledgeable and understand many different things as a way of protecting themselves from fraud. One way to accomplish this is to obtain a copy of your credit report every year. By accessing this information, you can help ensure that there is not any suspicious activity occurring in your name, such as identity theft. All of your personal identifying information, places you have resided, and accounts you have opened are found in this report.

Through the three reporting agencies, consumers have access to all the information that creditors, lenders, and employers would see. It is vital that you obtain a copy of your history from all three of these agencies because they are each different in what is listed. You may see something on one history that is not present on the other two histories.

On your reports, you will notice a category that is called Trade Line or something similar. This is the term used to describe accounts, in general, but within this category there are three sub-categories. Mortgage accounts are loans that have used real estate as collateral in securing the loan. Installment accounts are those when you pay a set payment for a specific period, such as car loans. Revolving accounts are accounts that remain open, have a set amount you can use, and require monthly payments to pay down the limit.

The second section to pay attention to is the inquiry section. There are only specific instances when inquiries will appear. If you apply for an account with a lender or creditor, called a hard inquiry, they will request a copy of your history and this will be counted as an inquiry. In some cases, companies with whom you have existing accounts will occasionally request another copy of your history, which is called a soft inquiry.

Your accounts are separated based on the status of the account. If you pay regularly and on time, the account is listed in the positive section. Late payments, defaulting on loans, and other such things put the accounts in the negative section. Creditors look at both sections to determine if you will be approved and how much your limit will be.

Mistakes in histories are quite common. A large portion of the reports that are obtained each year contain mistakes. The most common problems occur in accounts that have been sent to collections for non-payment or accounts that have been paid in full and closed out. When there is a mistake found, it is important to contact all three of the agencies in writing and file an account dispute.

There is a process to disputing items that you find in your history. You will need to provide all of the information that is given about the company and the account, including the company's address, account number, and limit amount. The agencies contact the company and the company has 30 days to respond. Once they have determined your claim is correct, the reporting agency removes the account from your history.

Your credit report plays a large role in your life. Not only is it a big part of consideration for loans and lines of credit, but some companies run the history of potential employees. The Fair Credit Reporting Act is a law that protects consumers from having their reports accessed illegally. Collectors, for example, are not legally allowed to pull reports and use any of the information against consumers and they can be sued if they engage in such practices.