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How to Read a Credit Report

The trouble with trying to explain how to read and understand your credit report is that there are so many different ways and formats that you might get your credit report. We suggest that the only place that you ever pull your own credit report from is www.720FICOscore.com, which will take you to the section of FICO’s website that allows you to pull your own FICO credit score and credit report.

That said, you might get your credit report from a lender who pulls your credit score. You might get it from www.AnnualCreditReport.com, which is the government-mandated website that allows consumers to pull their credit report once a year for free. (Remember, though, that you should never buy your credit score from AnnualCreditReport.com, though it’s okay to download your credit report once a year.)

Because there are so many different options for viewing your credit report, it’s tough for us to tell you exactly how to read and understand the specific credit report you are looking at. That said, assuming you get your credit report from www.720FICOscore.com, here is a quick reference guide. You can find a more complete summary on FICO’s website.

Your credit report will start with your personal identification information, which includes your name, address, and place of employment. Your previous address and previous employers might also be listed. Review this information for accuracy. If your employment information is outdated or you find a typo, don’t worry too much. This is a low-priority error that isn’t hurting your credit score. But if you find serious mistakes–like addresses at which you have never lived, or if you middle name is wrong–you might be a victim of identity theft, in which case you will want to read our articles about identity theft.

Next comes a credit summary, which summarizes the different types of accounts you have, including the total number of accounts, the balance, the numbers of delinquent accounts, and the number of accounts that are in good standing. It will include real estate accounts (mortgages, HELOCs); revolving accounts (credit cards, lines of credit, and retail credit cards); installment loans (like auto loans, student loans, personal loans, and secured loans); open accounts; closed accounts; public records; inquiries; and collection accounts. Many American Express cards will be considered as “other accounts” since they do not have a pre-set limit and therefore do not constitute traditional credit cards.

And now comes the more detailed account history section of your credit report, which is where most of the nitty gritty comes into play. This is where you need to really be on the lookout for errors. This is where you will find each of your credit accounts, as well as the details of to when you paid. Each account contains the name of the creditor, the industry of the creditor, your account number, the type of account (revolving, installment, mortgage, etc), the person who is responsible for paying the account, the minimum monthly payment, the date the account was opened, the last date the account was updated by the creditor, the balance, the credit limit, the high balance, the amount it was past due at the time of the last reporting, payment status, payment history, and other remarks about your account. Collection activities associated with the account might be listed as a separate section, depending on the creditor.

In this section, pay close attention to the credit limit that is reported. This is where many mistakes are made. Your 24-month payment history will also be listed on the account. (Remember: the last 24 months are the most important in determining your credit score). Your history will be reported using a code:

  • OK – This account is paid on time and in full.
  • NO – No data is available.
  • 30/60/90/120 – The number of days the account has been past due.
  • KD – This stands for ‘Key Derogatory’ which can mean many things including: Claim, Term Default, Government Claim, Paid by Dealer, Bankruptcy Chapter 7, 11 or 12 Petitioned, or Discharged and Bankruptcy Chapter 7, 11, or 12 Reaffirmation of Debt Rescinded.
  • RF – The property was repossessed or foreclosed.
  • PP – You and your creditor have agreed upon a revised payment plan.

Public records information comes next. This includes bankruptcies, judgments, tax liens, state and country court records, and, in some states, overdue child support. Only severe financial blunders appear in this section.