Understanding Your Credit Report

People in general dread credit reports, especially those who have had some rough financial times. In order to have a healthy financial life and to resolve any problems that you have with debt it's absolutely necessary for you to be well informed of your credit status. Both creditors and you the consumer can obtain this information on your credit history via credit reports.

In the United States three major companies handle most credit reporting: Equifax, Experian, and TransUnion.

Equifax: PO Box 740241, Atlanta, GA 30374, www.equifax.com
Experian: PO Box 2002, Allen, TX 75013, www.experian.com
Transunion: PO Box 2000, Chester, PA 19022, www.transunion.com

These credit reports contain your history for the last several years and include information on credit cards, auto loans, mortgages, student loans, and other debt. Any late payments that were reported by creditors will show up as well as how late you were. The reports also contain previous addresses, your current address, and your social security number. The information is available to any qualified party such as a bank, private lending institution, mortgage company or bank issuing a credit card.

Although the companies try to maintain accurate records errors may find their way into your report. Sometimes they contain accounts that you have paid off, accounts that you have closed or may reflect overdue amounts that are not accurate. Creditors do not always report on time and thus your reports may not always reflect your credit status accurately.

Your best bet to protect your credit rating is to review a report from each bureau on a regular basis. It is recommended that you utilize your three free reports each year by ordering a report from one of the bureaus every 4 months. Due to recent laws that were passed you can obtain your free reports by going to annualcreditreport.com.

If you have past due accounts clear those up first. Try to pay off smaller delinquent accounts first to allow you to free up more resources. Also, contact your creditors and try to get them to notify the credit bureaus that your account has been paid in full. If you continue to work at this you will soon be on the road back to a clear credit report.

If you see erroneous information gather proof of the error and fill out dispute forms with the bureau that lists it. Understanding your past credit history is the first step in creating a solid plan for a debt-free future.

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