How to Read a Credit Report

What does a credit report show? Each of the credit bureaus organizes its reports differently, but in general, you can expect to find information across five sections:

1. Personal information

In this section, you’ll find your:

• Name, including aliases or former surnames (check all spellings to ensure they’re right!)
• Social Security number
• Date of birth
• Current and previous addresses
• Phone number
• Employment history

2. Credit history

This is the most important part of your credit report. The credit bureau will list your:

• Current and closed accounts
• Payment history
• Amounts owed and total credit limit for each account
• Current balance

The credit report will also note any loans you’ve defaulted on or have gone to collections.

You should verify that all the information is correct, but specifically, look for:

1) accounts with bad marks that should be in good standing, and

2) accounts you don’t recognize.

Why it matters: On-time payments account for 35% of your FICO credit score³ (40% for your VantageScore⁴), and credit utilization follows closely behind at 30% (20% for VantageScore). If your credit report has errors that misrepresent your payments or how much credit you’re using, it could drastically affect your credit score.

3. Public records

Though this section previously included tax liens and civil judgments, it now only highlights bankruptcy filings. If you haven’t filed for bankruptcy, this section will be blank.

4. Inquiries

Whenever someone pulls your credit report to review your information, it results in a hard inquiry on your report.

The occasional hard inquiry isn’t terrible for your credit (and they fall off the report after two years⁵). However, multiple hard inquiries in a short time frame can signal to lenders that you’re scrambling to acquire credit. Pick and choose credit applications carefully.

5. Consumer statements

As a consumer, you have the right to leave a comment on your credit report to clarify anything you think lenders should know.

For instance, if you fell behind on your credit card bill because you were laid off, you can add a consumer statement explaining this.

This won’t impact your credit score, but it does allow potential creditors to get a fuller picture of your finances – and may result in a loan approval even if your score has suffered.

Credit report vs. credit score

Your credit report and credit score are closely related but different. Your credit report is a collection of information about you that represents your credit history: what credit you have and how you pay it back.

Based on the information in these reports, credit score companies like FICO and VantageScore use formulas to calculate a three-digit score. This score, typically from 300 to 850, represents how well you manage credit.

According to FICO’s system, here’s what each credit score range means:⁶

• 579 or below: Poor credit (or no credit history). Lenders view these consumers as large risks and may not offer credit. If they do, the rates and fees could be high.
• 580 to 669: Fair credit. While below average, this credit score range is often enough to get qualified for certain types of loans.
• 670 to 739: Good credit. Borrowers with good credit scores can typically get various loans, including credit cards, mortgages, car loans, and personal loans.
• 740 to 799: Very good credit. These borrowers can easily get loan approval with reasonable rates and low fees.
• 800+: Exceptional credit. Borrowers with an 800+ credit score will get the lowest rates for credit offers and can often get loans and lines of credit without fees.