When you’ve recently graduated from college or are about to, it’s an excellent time to review your credit report and discover where you stand.
This is very true in case you’re ready to start out in search of a job, an apartment or simply need to upgrade your student card to at least one with more rewards — your credit history could impact all of it.
Read on for our step-by-step guide on methods to read your credit report and the red flags you need to be careful for.
Table of contents
The best way to get a credit report
First, it is advisable know methods to get a credit report. By law, you’re entitled to a free copy of your credit report weekly from each of the key credit bureaus. You may get these free reports from AnnualCreditReport.com.
Note that these don’t include your credit rating. Nonetheless, in case your credit history may be very transient, it’s possible you don’t have a rating yet. When you have already got some credit, listed here are some ways you possibly can check your rating:
- Check your bank’s online portal to see in the event that they provide it totally free
- Buy it from the credit bureaus themselves
- Buy it from FICO or VantageScore
The best way to read your credit report
Your credit report can have a unique structure depending on the credit scoring bureau that issues it. Having said that, the key bureaus — Experian, Equifax and Transunion — can have roughly similar sections, as described below.
Personal information
The primary section of your credit report will list your personal information. This information is gleaned from public records or from credit applications you may have filled out previously, and includes:
- Name
- Social security number
- Addresses
- Phone numbers
- Birth date
- Past and current employers
None of this really impacts your rating; nevertheless, you need to still check it fastidiously to be sure that that the data reported pertains to you.
When you find details that don’t correspond to you — for instance, a reputation or addresses you don’t recognize — it could indicate a mistake in reporting or an indication of identity theft. In that case, it’s necessary to analyze further by checking the remaining of the report for accounts that don’t belong to you.
Bank cards and loan accounts
This section accommodates all of the credit accounts your creditors are currently reporting to the bureaus.
When you are currently throughout the six-month grace period many student loans grant after graduation, they won’t appear on this section yet. Nonetheless, in case you’re getting your credit report after that grace period ends, these loans shall be reflected here.
Note that student loans typically consist of multiple loan accounts, so you may see each listed individually on this section.
When you’re a licensed user on a member of the family’s card or in case you got a student card while at college, you’ll also see those accounts reported here.
Each account will include:
- Account type
- Outstanding balance
- Name and address of creditor
- Account opening and/or closing date
- Credit limit or loan amount
- Account status
- Payment history
Note that payment history is usually listed as a grid divided by months. If there are not any numbers inside that month, it means payments were made on time. If payments were late, then the grid will reflect what number of days late it was — whether it’s 30, 60, 90 or more. Sometimes late payments shall be marked in red.
Negative accounts
The following section of the report will normally be the so-called negative accounts. This refers to accounts that weren’t paid as agreed, akin to defaulted loans or bills that went to collections.
Accounts in collections — that’s, debt that the unique creditor has sold to a debt collection firm — will include the name of the gathering agency, the unique creditor, the date it was sent to collections and the balance owed.
Public records
When you’re unlikely to have public records in case your credit and financial histories are transient, this section would typically reflect financial issues that required government motion, akin to bankruptcies.
Inquiries
The section on inquiries will reflect requests to acquire your credit report, whether the request was made by you or third parties.
Inquiries might be classified as hard or soft. Soft inquiries are those who usually are not made in reference to a proper application for credit — for instance, once you request your individual report or a lender checks it as a part of a pre-qualification offer. These don’t impact your credit rating.
Hard inquiries, then again, are inquiries made by lenders as a part of a credit evaluation, akin to once you apply for a bank card or a mortgage. These kinds of inquiries do impact your rating, although not by much and only temporarily.
It’s necessary to do not forget that inquiries can only be reported for 2 years; in case you see older inquiries there, you could possibly dispute them with the credit bureaus.
Dispute errors
Under the provisions of the Fair Credit Reporting Act (FCRA), you’ve gotten an in depth list of rights in the case of your credit — chief amongst them is the precise to a good and accurate credit report. Which means that, in case you find misinformation in your report or items that shouldn’t be reported anymore, you possibly can dispute them with the credit bureaus. By law, they need to investigate your claims inside 30 days.
You may easily dispute information on each bureau’s website:
Nonetheless, if you’ve gotten several errors in your credit or find that you’ve gotten been the victim of identity theft, you could possibly consider hiring a reputable credit repair service that can do the be just right for you.
The Recent Graduate’s Guide to Reading a Credit Report — and What to Watch Out For FAQs
How can college students construct credit?
When you needed to borrow to pay for school, you’re already constructing credit. In truth, student loans are sometimes the primary credit account many Americans have. Lenders won’t start reporting your account until it’s time to pay it back, which will likely be six months after graduation or your enrollment drops to part-time or less. But, once they do, it’s going to make it easier to construct a credit history. One other solution to construct credit while in class is student or secured bank cards. These cards are tailored for borrowers with limited credit histories and have higher approval odds than regular cards.
At what age do you begin constructing credit?
You may technically start constructing credit at any age. While you’ve gotten to be at the very least 18 to get your individual bank card, your parents or members of the family can add you as a licensed user to their very own bank card at any age. This activity shall be recorded in your credit history in addition to theirs.
How often must you check your credit report?
Everyone should check their credit report incessantly, at the very least every three months. Even in case you don’t have much of a credit history, the rise in data breaches and leaks have made it essential to be looking out for signs of identity theft. Catching identity theft early could make it easier to prevent damage to your credit rating.