Your credit report is essentially a report card showing how responsible you have been with past borrowing and showing the type of debt that you have outstanding. It is important to know how to read your credit report so you can see what areas you need to improve to boost your score and so you can identify mistakes or problems with your credit report.
Your Credit Report Payment History
Your credit report contains information on your payment history for each of the different credit cards, mortgages and other loans and debts that you have. Your payment history reports will detail whether you have ever been late and, if so, whether your late payment was 30, 60 or 90 days late. If you had a debt discharged or declared bankruptcy, this will also show up in the payment history and public records section of your report.
Your Credit Utilization and the Kinds of Credit You Have
Another important thing that creditors look at on your credit report is the mix of different kinds of credit that you have and the amount of available credit you have used.
If you have a credit card with a $1,000 limit and you have used $500, this would indicate that your credit utilization was 50 percent. The lower your credit utilization, the better your credit score should be. Ideally, this should be kept below 30 percent.
The mix of different kinds of credit also matters, as lenders like to see that you have taken on different kinds of loans like a mortgage, car loan and credit cards, and have been responsible for paying all of them on time.
Checking Your Credit Report
Once you know what to look for on your credit report, you should check the report routinely in order to see what the creditors are reporting about your debt. You can also be on the lookout for any credit accounts you have not opened but that show up on your report. An account you do not recognize can be a sign that you have been the victim of identity theft or that a mistake is on your report.
There are services such as IDENTITY GUARD® Platinum that will allow you to easily check your credit on a regular basis. To learn more about these services, visit Credit Report 123 today.