Understanding Your Online Credit Report Before Getting A Loan

Understanding your free online credit report is one of the most useful things you can do before applying for a loan. This is because your free online credit report, which contains a wealth of information about your personal online credit report score, is the means by which potential creditors/lenders will determine if you are a good credit risk, and a way for them to establish that you have the sufficient and satisfactory credit history for the loan requested.

In this article, we will summarize the standard information contained in your free online credit report, and by doing so provide you with the means to improve your credit score, increase your credit score, determine if you need credit repair and raise your credit score, or if none of the above applies to you, simply to understand your credit score in more depth so that you will be able to confidently get your next loan.

The first step in checking your credit report is to visit the website of the three credit bureaus that currently offer instant, free copies of your credit score. These 3 credit bureaus are (in alphabetical order) Experian, Equifax, and Trans Union. Entering your information to access your personal credit report is simple. Just follow the prompts on your screen, and instantly, you will receive a free copy of your personal credit report, which contains five sections:

1. Personal profile
2. Credit Summary
3. Public records
4. Credit Inquires
5. Account history

Personal Profile: This first section contains your unique personal credit report information, such as: your legal name, any other name(s) that are related to your personal credit file, your date of birth, your current and previous addresses, and your current and previous employers.

Credit Summary: This second section gives you an overview of your credit status. It shows all of the accounts that are listed in your name, their dollar value, whether you have any bad credit loans, any bad credit cards, and how often creditors/lenders have accessed your credit score through your personal credit report. The Credit Summary section relies on some specific terms to convey this information. These are: Real Estate Accounts (mortgages and other property); Installment Accounts (accounts with set payment schedules), Revolving Accounts (e.g. credit cards and lines of credit); and Collection Accounts (delinquent accounts). You will also find a series of Report Terms. These include: Count (number of accounts in each category); Balance (total of all outstanding balances); Payment (sum of all current minimum payments due when the online personal credit report was generated); Current (number of accounts that have been paid on time); Delinquent (the number of accounts that are past due); Other (all other accounts that have not been included in these categories); Close Accounts (total number of accounts that have been closed); Public Records (number of federal district bankruptcy records, state, and county court records, tax liens, and monetary judgments in your name); and Inquiries (number of times your personal credit report has been access in the last six months).

Credit Inquiries: This third section displays all of the companies that have accessed your credit report. There are two types of inquiries: Hard Inquiries and Soft Inquiries. Hard Inquiries are conducted by creditors/lenders in response to your request for credit/loan. Companies that conduct Hard Inquiries only see inquiries that have been made by other creditors/lenders. Soft Inquiries are conducted by employers when they check your credit score. The names and dates of all inquiries, Hard or Soft, are listed in this section of your free, online, instant credit report.

Public Records: This fourth section of your credit report displays information from federal district bankruptcy records, state, and county court records, tax liens, monetary judgments, and in some states, overdue child support records. This information remains on your credit report for 7-10 years. This Public Records section relies on specific terms to convey important information. These terms are: Type (type of public record); Date Filed (the date that your personal credit record was created); Reference # (your personal credit record's legal identifying number); Court (the court that has legal jurisdiction over your personal credit record); Plaintiff (the person or company listed in a legal judgment, if applicable); Liability (the dollar amount for which the court decided that you were legally responsible, if applicable); and lastly, Asset Amount (the amount of total personal assets taken into account by the court making the decision, if applicable).

Account History: The fifth and final section of your credit report displays your account history, and includes information on each credit or bank account that you've opened. Positive information remains in this section permanently.

Thus, as you can see, accessing your free credit report is a highly effective way to access information about your personal credit score from any of the credit bureaus. Remember, this is a completely free process, and is the easiest, and most effective way that you can obtain your credit report and score, and determine the strategies that you take, if necessary, to repair, fix, improve, or increase your score in preparation for your next loan. Remember, even with flawed credit, you still may be able to access a so-called bad credit auto loan, or a bad credit personal loan.