Since I realized that I have been allowing myself to keep the big picture of my finances obscured by a sort of fog, I have been taking steps in the direction of learning about what my finances actually look like. Today, I thought that I would just go online and take a look at my credit reports to see what was in them. The reports are written in English, but after looking at them for about ten minutes I realized that I have to educate myself about how to read a credit report before I can actually make sense out of the information that is there.
Some of the information in credit reports is fairly straightforward, such as the section where your personal information is listed. The more detailed information can be found in the “Account History” section for each of the accounts in your report. When you go to read your credit report, there may be more accounts on there than you think that you have. There are a few reasons why this could be so. Some types of accounts may have more than one entry. For example, while I think of my student loans as two loans from two different lenders, one of those lenders has about five different loan groups listed on my report. Another area where it can look like you have more accounts is if you have an account that is with a collection agency. The original account that got charged off is listed by the original lender, and the collection agency is listed as another account. To confuse things further, collection accounts may appear under the Account History section or in a separate section depending upon which of your three credit reports you are viewing.
If it has been a while since you have checked your credit report, it is a good idea to do it. In fact, checking it once a year is a great way to make sure that your credit score is always accurate. Before you go to the report, though, you may want to refresh your memory about how to read it so that you don’t end up staring blankly at the computer screen.
Photo by kahle on morguefile.com.