Understanding your credit report score, once you get the hang of it, will help you to protect your credit.
Identifying Information
Your credit report can be looked at as having four parts. The first section, identifying information, is pretty much what it sounds like, information about you. You will see your name, Social Security number and other information such as your address, date of birth, driver's license number and previous addresses where you have lived.
Credit History
The credit history section of your credit report will list companies to which you owe money and your account numbers with them, although the account numbers may be scrambled for your protection. The individual accounts, or trade lines, will include information about your payment history, such as when you opened the account, the total amount of the loan and how much you still owe on the loan. If the trade line is a credit card account, your credit limit or the most that you have charged against your card will be listed. All of your trade accounts will list your monthly minimum payments, if the account is open or closed, and how timely your payments are or were.
"How well you pay" may be written out, such as "never pays late" or "default," or may be shown in code such as "R1" for good payment on a revolving loan.
Negative information on your payment record can remain in this section for up to 10 years.
Public Records
The public records section is the major cringe section of your credit report. This is the section where any difficult financial problems that you may have had will be listed, such as bankruptcies or tax liens. Optimally, the public records section of your credit report will be blank.
Inquiries
The inquiries section covers companies that have inquired about your credit, including "hard" inquiries, or those which you initiated when you filled out an application for credit, and "soft" inquiries, or inquiries from companies such as those that might be sending you pre-approved credit cards.
Inquiries can stay on your credit report for up to two years.
FICO Scores
Your credit report is used to determine your FICO score, which is used to help determine your creditworthiness. Your FICO score can range from 300 to 850. The higher your FICO score, the more likely you are to get credit.
Maintaining Your Credit Report
There are three major credit reporting companies in the United States: Experian, TransUnion, and Equifax. You are entitled to receive a free credit report from each of these agencies every 12 months. It is wise to request copies of your credit report from each company to check for errors. Fixing errors on your credit reports might improve your FICO score.
You can also get a free copy of your credit report from the reporting credit bureau if you have been turned down for credit. You have up to 30 days to request your report after you have been turned down.
Improving Your FICO Score
Ways of improving your FICO score include:
 | What is a good credit score, and why is it so important to know your score? If you know your score, you'll be able to see how you look in a lender's eyes. |
 | Learning how to improve FICO scores could save you a lot of money. |
 | A good FICO credit score is one of the most important aspects of a healthy financial situation. Knowing what affects your FICO score and why a good one is so important gives you great financial freedom and can save you a great deal of money. |
Discover ways to improve your credit score without the help of a consumer credit agency. |
Find out what is considered a good credit score and what yours can do for you. |
