How to Understand Your Credit Report and Recognize Identity Theft

Being able to read and understand your credit report is important. If you know what’s on your report, you’ll be able to recognize identity theft when it happens. The sooner you can detect the fraud, the sooner it can be taken care of. Early detection can be the difference in thousands of dollars of damage. The following information will show you how to understand your credit report and recognize identity theft.

A credit report is basically report card for your credit. It lists your current and past credit transactions to determine your credit worthiness. There are three bureaus that list this information. They are Experian, Equifax, and TransUnion. These are independent companies that are federally regulated. Your creditors will report information about your accounts to one or all three of these companies. The companies also get information about you from public record sources like tax records and court systems. Any potential credit issuer will have access to your report. The information on the report is how they determine if you’re approved, how much you’re approved for, and even sometimes your interest rates and deposit amounts.

Your credit report contains a lot of information. Obviously, the older you are and the more credit you have, the more your report will contain. While the layouts may differ between credit bureaus, each report will contain the basics like your name, address, previous addresses, your employer’s information, you date of birth, your spouse’s name, and your social security number. Besides the basics, your report will contain information on any credit accounts you have or have had for 7 years, whether they are open or closed. It will have the name of the creditor, your total credit amount, and how much your payments are. It will also tell you if your payments have been made on time or if they are late. Other information that may be included on your report is collections, bankruptcy records, inquiries from creditors, and any statements from you that you’ve requested be attached to your report.

The credit bureaus are not responsible for making sure the information they report is correct. That is up to the creditors and you. Since creditors often make mistakes, the burden falls mostly to you to correct any mistakes you see. You are entitled to a free copy of your credit report every year. Take advantage of this service so you can look over your report. Check it carefully and make sure there are no mistakes, especially accounts that you don’t recognize. If you do find mistakes, you’ll want to notify the creditor and the credit bureaus to get it removed. There are many times an identity thief will open new accounts in your name that will show up on your report, so make sure you keep an eye out for this.

Being familiar with the information on your credit report is a big step in being able to recognize identity theft. Many people have no idea that someone has stolen their identity until they go and apply for credit. Suddenly they’re denied and have no idea why. Don’t let this happen to you. Order a copy of your report as soon as possible and start familiarizing yourself with it. Again, if you find any mistakes or suspicious activity, report it immediately.