Understand Your Credit Report
Your credit report is the foundation of your financial health. Learn how to read it, understand what it means, and take action to improve your credit score. Free education for everyone.
Complete Credit Education Guide
Master your credit score with our comprehensive guide. Learn what credit scores are, how they work, and proven strategies to build excellent credit.
What is a Credit Score?
Understanding Credit Scores
A credit score is a three-digit number that represents your creditworthiness to lenders. In the United States, credit scores range from 300 to 850, with higher scores indicating better credit health and lower risk to lenders.
Why Credit Scores Matter:
- Determine loan approval and interest rates
- Affect insurance premiums
- Impact rental applications
- Influence employment opportunities
- Affect utility deposits and cell phone plans
💡 Pro Tip
Your credit score is calculated by three major credit bureaus in the United States: Experian, Equifax, and TransUnion. All three use similar but slightly different scoring models.
US Credit Score Ranges
Understanding Your Credit Report Sections
Every credit report contains four main sections. Here's what each one means:
Personal Information
This section contains your identifying information:
- Full name and any name variations
- Date of birth
- Social Security Number (SSN)
- Current and previous addresses
- Employment history
⚠️ Important: Check for misspellings or incorrect addresses. These could indicate identity theft or data errors that need to be corrected.
Credit Accounts
This is the most important section. It lists all your credit accounts including:
Credit Inquiries
This section shows who has checked your credit:
Public Records & Collections
This section includes serious negative items that can significantly impact your credit score:
- Bankruptcies (stay on report for 7-10 years)
- Collections (stay on report for 7 years)
- Legal judgments
- Tax liens
- Foreclosures
⏰ Time Limits: Most negative items must be removed after 7 years. Bankruptcies can stay for up to 10 years.
Common Credit Report Errors to Look For
Up to 1 in 5 people have errors on their credit reports. Here's what to check:
❌ Incorrect Personal Information
Wrong name, address, or SSN can indicate identity theft or data entry errors. Always verify your personal information is correct.
❌ Accounts That Aren't Yours
Accounts you didn't open could indicate identity theft or mixed files. Dispute these immediately with the credit bureau.
❌ Incorrect Payment History
Payments marked as late when you paid on time can significantly damage your score. Gather evidence and dispute these errors.
❌ Outdated Negative Information
Negative items should be removed after 7 years (most items) or 10 years (bankruptcies). Check that old negative items have been removed.
❌ Duplicate Accounts
The same account listed multiple times can make it look like you have more debt than you actually do. Report duplicates immediately.
How to Dispute Credit Report Errors
If you find errors, you have the right to dispute them. Here's how:
Document the Error
Gather evidence supporting your dispute: receipts, statements, payment confirmations, and any correspondence.
Contact Credit Bureaus
File a dispute online or by mail with Experian, Equifax, and TransUnion. Include all supporting documentation.
Contact the Creditor
Also notify the company that reported the error. They must investigate and correct inaccurate information.
Follow Up
Credit bureaus have 30 days to investigate. Check back to ensure errors are corrected or removed.