How to read and understand your credit report

The lender told you to get a copy of your credit report as part of the pre-qualifying process for a mortgage. He explained that the purpose was to find out how your credit looked and to clear up any errors that might be in the report.

But now that you have got it, there are an awful lot of numbers, abbreviations and terms you have never seen before. Trade lines, charge-offs, account review inquiries: how do you read this thing?

First of all, there is one private Credit Bureau, ACRA Credit Bureau, operating in Armenia.

A credit report issued by the Bureau is basically divided into three sections: identifying information, credit history and statistics of inquiries.

Identifying information is simply the information that helps to identify you. Look at it closely to make sure it is accurate. Sometimes the same name can have two or three different spellings or more than one passport or Social Security number. That is usually because someone reported the information that way. The variations will stay on your credit report, because if it is reported wrong, the credit bureau leaves it because it might mess up the link. Do not be concerned about variations. Just apply for correction.

Other information might include your current and previous addresses, your date of birth, telephone numbers.

The next section is your credit history.

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:

• The date 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),
  
• Total amount of the loan, high credit limit or highest balance on the card,
  
• The amount you still owe,
  
• Fixed monthly payments or minimum monthly amount,
  
• Status of the account (open, inactive, closed, paid, etc.),
  
• Your performance of repayment of the credit.

The final section is the inquiries. That is a list of everyone who asked to see your credit report.

Any time anyone gets into the report, it will post an inquiry. "If you call the credit bureau and ask for a copy, it will be on there. It is a very detailed entry record which is great from the consumer's perspective." If you find a mistake on your credit report, such as an account that is not yours or a disputed amount, you will need to fill out the form that comes with the report, or follow the instructions on the explanatory sheet. The process takes time because the creditors have 30 days to respond to a charge of a discrepancy. As long as a charge is in dispute, that dispute will show up on your report.