Financial Planning

In order to make sure that accurate information is listed and no form of unauthorized activity has taken place, consumers should review their credit report every six to twelve months. There are several ways to obtain a credit report at no charge. The easiest way is to go to the Federal Trade Commission Web site and follow the instructions in order to obtain a free annual credit report.

Once the report is delivered, it is important to understand how to read it. There are several sections to the report and some are more self-explanatory than others are. The identification section contains name, address, Social Security number, date of birth, and name of spouse. Former addresses and past employers will be listed in the additional information section.

The credit history section is the main component of the report. This area details the credit accounts that are open and paid. If the consumer has any late payments, those will also be included in this area. For each creditor, the following will be listed: company name, account number, who is responsible for the account (individual, joint, co-signer, etc.), date opened, number of months of account history, date of last activity on the account, highest amount charged, number of installments (if applicable), balance, amount past due, type of account and timeliness of payment, and date the information was reported by the creditor. Closed accounts will be listed as such on the report.

If any accounts have been referred to collection agencies in the prior seven years, they will be shown in the collection accounts section of the credit report. The name of the collection agency and amount owed will be listed. If any information in this section appears unfamiliar, contact the collection agency in order to get clarification.

Bankruptcies, tax liens, judgments, and overdue child support will be displayed in the public/courthouse records section. This area contains public records obtained from local, state, and federal courts. The last area on the report includes a list of all businesses that requested your credit report in the past two years. If any of the information on the report seems inaccurate, contact the credit-reporting agency and submit a dispute letter if necessary.