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debt
Checking and reading your credit report

"If you compared the two reports side by side, the consumer one will have a couple more pages of information," says John Ulzheimer, president of consumer education with credit.com and former business development manager for myfico.com, a Web site of the Fair Isaac Corp. Fair Isaac is the creator of the FICO score, the widely known credit scoring model that is used to determine a person's credit risk.

Understanding the setup
A credit report is basically divided into four sections: identifying information, credit history, public records and inquiries.

Identifying information is just that -- information to identify you. Look at it closely to make sure it's accurate. It's not unusual, Sweet says, for there to be two or three spellings of your name or more than one Social Security number. That's usually because someone reported the information that way. The variations will stay on your credit report; "If it's reported wrong, we leave it because it might mess up the link. Don't be concerned about variations."

Other information might include your current and previous addresses, your date of birth, telephone numbers, driver's license numbers, your employer and your spouse's name.

The next section is your credit history. Sometimes, the individual accounts are called trade lines.

Each account will include the name of the creditor and the account number, which may be scrambled for security purposes. You may have more than one account from a creditor. Many creditors have more than one kind of account, or if you move, they transfer your account to a new location and assign a new number.

The entry will also include:
  • When you opened the account
  • The kind of credit (installment, such as a mortgage or car loan, or revolving, such as a department store credit card)
  • Whether the account is in your name alone or with another person
  • Total amount of the loan, high credit limit or highest balance on the card
  • How much you still owe
  • Fixed monthly payments or minimum monthly amount
  • Status of the account (open, inactive, closed, paid, etc.)
  • How well you've paid the account

On Equifax's report, your payment history is written in plain English -- never pays late, typically pays 30 days late, etc. Other comments might include internal collection and charged off or default.

"Charged off means the creditor has given up, thrown in the towel," Ulzheimer says. "He's made efforts to collect and written it off."

Other reports include color-coded payment legends. A green OK mark means the consumer is current on payments; a red PP designation means the debtor is on a payment plan. Numbers indicate how late a payment was.

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The next section, public records, is the part you want to be absolutely blank. The public records section "is never a good story," Sweet says. "If you have a public record on there, you've had a problem."

It doesn't list arrests and criminal activities, just financial-related data, such as bankruptcies, judgments and tax liens. Those are the monsters that will trash your credit faster than anything else.

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