If you know anything about the financial world, you know that credit, and getting your credit report often is important. It helps you protect your credit from identity theft, etc. It also helps you see where you are, and where you need to be.

Knowing what is on a credit report, and how to read it is an important part of being financially responsible. Take a few moments to learn what is on a credit report, how that information applies to you, and why it is important to regularly check your credit reports.

Although each credit reporting agency formats and reports the information differently, all credit reports contain basically the same categories of information. They have identity information, scoring information, and creditor information.

Personal Identity
Your social security number, date of birth and employment information are used to identify you, but are not factors used in credit scoring. This information gets updated frequently, but you do not have to call the credit bureau to update it, instead, updates to this information come from information you supply to lenders. The lenders in turn supply the info to the credit reporting agencies.

What personal information is included on your credit report?

• Full name and variations of it (such as maiden names)
• Social security number
• Birth date
• Current and previous addresses
• Current and past places of employment
• Driver's license number and state where issued

If when you check your credit report you see information that is incorrect, or that is not yours, that should give you cause to alarm. You should look into it, and make sure that the credit being reported is actually yours. The way they know the credit is yours is through the personal identification information on the report. You can contact the credit agencies directly to have personal information changed, or to put fraud alerts on your account in case you see information that is not yours.

Collections and public record items
In addition to the identity information there is going to be information about your debt and your collections. The public records and collection accounts will have a list of all of these credit related things. Basically, if a bill you owed on went to collections in the last seven years, it is going to show up on your credit report, and hurt your credit rating. Most of this data is collected from the court system and from debt collection agencies.

This section includes:

• A list of everyone who accessed your credit report within the last two years.
• Voluntary inquiries. (these are when you apply for credit and say it is okay for them to pull your credit)
• Involuntary inquiries. (this is when someone pulls your credit without permission from you to pre-qualify you for a loan. These are the credit card offers you get in the mail)

Involuntary inquiries do not count against you on your credit score, but if you have too many voluntary ones it looks like you might go on a credit binge, and thus your score will lower in response. Thus, voluntary inquiries count toward your FICO score, and involuntary ones do not.

Inquiries that count toward your FICO score are the ones that take place when you apply for a mortgage, auto loan or other credit; you authorize the lender to request a copy of your credit report. These types of inquiries, prompted by your own actions, appear on your credit report and are included in your FICO score. However, it is good to note that your FICO score is not affected when you check your credit for personal reasons, but this has been limited to one time per year per national credit bureau.
 
Checking your credit reports regularly to be sure they are accurate and error-free is a good idea. In fact, maintaining accurate credit reports is a part of good credit management, which can help to improve your FICO scores over time. In order to check your credit score you can visit the government sponsored site www.annualcreditreport.com and apply to receive a free credit report. It has no purchase necessary, you do not have to sign up for any sort of trial anything, and you can get a copy of your report from all three agencies at once, or you can stagger them and request one from each throughout the year, which would help you catch problems more quickly and keep your report more accurate.

There are five types of information used to calculate a FICO score at any given point in time. Each type of information counts as a percentage of a total FICO score:

• Payment history = 35%
• Amounts owed = 30%
• Length of credit history = 15%
• New credit = 10%
• Types of credit in use = 10%

Each of these things are going to be shown on your credit report, so look for areas where you could improve your credit. Paying on time is going to be more important than diversifying your credit types, so keep that in mind as you look at your report, and as you work to improve your FICO score.

So a credit report is a couple page way for a creditor to assess how worthy you are of credit. It does not show your income, but it does show how much debt you are carrying, how well you are doing at paying your debts on time and lowering your balance. It also shows how much of your available credit you are using. It gives you contact information for your creditors. Any creditor that shows up on your report will have an address, telephone number, or website available to you so that should you need to contact them you can. If you see something inaccurate on your report, take advantage of this information, and send corrections and proof in writing. If you find identity theft on your credit report, you need to file a police report, and then report the theft to the credit bureaus.

Inclusions are:

• Liens and judgements
• Bankruptcies
• Foreclosures
• Wage attachments
• Accounts in collection
• Police reports that may affect your credit

There are some loans that you can not qualify for if you have ever had a bankruptcy or had anything go to collections. If your credit is ruined by this happening to you, it will take seven years to get it off your report, but in the mean time you need to work to show your credit worthiness by rebuilding your credit, paying on time, in full, and responsibly.

Credit history and current obligations
Along with loans that you are not paying, or things that are in collections your credit report will include a credit history, and current obligations. It is the responsibility of the creditors to report this information to the collections agencies. In many cases they will only report to one or two of the agencies, and this is why your score can be different from one credit bureau to another. However, the things reported, and shown on your credit report in this area are relatively the same.

Inclusion are:

• Dates accounts were opened
• Types of accounts (revolving, installment loan, mortgage)
• Account balances and credit limits
• Payment history for each account, including late payments
• Unpaid child support and overdrawn checking accounts can also be listed in this area.

Trade Lines are another way to refer to credit history and current obligations, and sometimes are reported separately, but are pretty much the same thing. These are your credit accounts. Lenders are required to report on each account you have established with them. However, they are not required to report it to each of the three agencies, just one. They report the type of account, whether it is an auto loan, mortgage, or even just a bank card.

Inclusions in their report are:

• Type of loan
• Date you opened the account
• Your credit limit or loan amount
• The account balance
• Your payment history. (both positive and negative)

When the credit bureaus calculate your credit score they look at the mix of credit you have, how long your credit has been open, how many times you have paid late, how much of your balance you have paid down, etc. It is important that you check your credit reports and make sure all your current credit, and trade lines are being reported, and that they are not being reported inaccurately. Inaccurate reports can damage your credit, so if you know you paid on time, or you did not open an account, you can have the creditor look into it and correct it if they reported it to the credit reporting agencies incorrectly.

Credit Inquiries.

The next thing you will see on a credit report are any inquiries that are recent. Recent means within the last two years. Basically, when you apply for a loan, you authorize your lender to ask for a copy of your credit report. Whether you are granted the loan or denied it, these inquiries appear on your credit report.