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How to Build a Credit Score – Jean Chatsky | American Express

Credit is one of the most misunderstood tools in the financial box. Used well, it can help you attain things you want in life – things that might otherwise be unavailable. Used, well, not so well, it can get in the way of your hopes and your dreams. This guide to credit is designed to help you understand how credit really works in today's world – and in your household. There have been a great many changes over the past decade, not only in how credit is issued, but also in how you can keep tabs on and manage the credit you have. Having this information at your fingertips is the first step to making sure you stay on top of this important resource.

So here's a step-by-step guide that answers all of your questions about what is considered a good credit score, how to start building a credit history, how to best manage it, and how to manage the credit choices you'll face throughout your life.

Q: How do I start building a credit history?

A: You can’t build a credit score if you don’t have any credit, so step one is to apply. When you apply for your first credit or charge card, student loan, car loan, or even utility, you will fill out an application. The credit issuer will then make contact with one of the country’s three big credit bureaus – TransUnion, Equifax or Experian – which, upon recognizing they don’t have any information on you, will start a credit file for you. The other two bureaus will learn about you shortly thereafter.

As you pay the bills on that credit or charge card or loan, your creditor will send details on you to the bureaus, telling them whether you paid on time (or didn’t), what percentage of the outstanding debt you paid, and whether you stayed within your credit limits. That’s all it takes to start building a credit history. Now, each time you pay a bill or apply for credit elsewhere, your report grows thicker. And although some information will eventually fall off the report (generally seven years down the road) much of it will follow you around for as long as you have and manage credit.

Q: How did I get a credit score?

A: Six months into your life as a borrower, there was enough information in your file for the credit bureaus to assign you a credit score. This is a numerical translation of your credit report that future lenders (as well as insurers, utility companies, landlords and others) will use to make decisions about whether they want to do business with you – and, in some cases, how much to charge you, as well. Now, every time new information appears on your credit report your credit score adjusts.

You should also understand that you don’t just have one credit score. You have many. There are two reasons for this.

  • First, every creditor does not report information to each of the three big credit bureaus. Some do. But some of the smaller ones (utilities, for example) only report to a single bureau. And each of the bureaus computes a score based only on the information in its proprietary report. For that reason, your score from one bureau might be higher (or lower) than at the other two. 
  • Second, scores are tabulated using different formulas for different purposes. An auto lender is going to want to see your “auto score” which puts more weight on how well you’ve done paying car loan bills in the past, for instance. An insurance company is going to want to see your “insurance score” which was built specifically to clue homeowners and auto insurers in to how many claims you were likely to file.

Finally, there is now competition in the credit scoring world that has resulted in more scores. The FICO score, calculated by a company called Fair Isaac, is the standard and continues to be used exclusively by many lenders. But the VantageScore, a newer scoring model developed by the three major credit bureaus to compete with FICO, is gaining traction. According to data from the company, 2,000 lenders used the VantageScore in 2014, including six of the 10 largest banks. One billion VantageScores were calculated and used by lenders overall in 2014.

That increased foothold in the market means many credit experts are now saying that you should pull both scores before applying for a major loan. After all, you don’t know which score the lender will look at, and you want to find out about any issues ahead of time, so you can postpone your application if necessary.

Both VantageScore and FICO operate on scales of 300 to 850, and the higher your number, the better. Because the scores use slightly different algorithms, don’t be surprised if your scores from each vary.

Q: How do debit cards and prepaid cards impact my credit?

A: Debit card and prepaid card issuers generally do not report activity to the credit bureaus, meaning your usage will not impact your credit. If you’d like to build your credit score but don’t qualify for a standard credit card, consider a secured card, which allows you to make a deposit in exchange for a line of credit in that amount. You use the card and pay it off regularly, and the card issuer reports that activity to the credit bureaus, which helps you establish a credit history. After a period of responsible use – generally 24 months – the card converts to a regular credit card.

Q: What's a "thin" credit file?

A: It's a credit history that contains very little information – typically three accounts or fewer. These accounts aren't just credit cards, but also car loans, personal loans, student loans, etc. In some cases people with thin files may be denied credit because there isn't enough there for a lender to base a decision on. What can you do about it? Apply for additional credit.

Wait, you're saying, I already did that, and was declined because of my thin file. But you have to apply for the right credit. If you're young, or married, you can ask your parents or spouse respectively to add you as an authorized user on one of their credit card accounts (note, this is only a good idea if they are responsible users of credit). As you and the primary cardholder use that card and pay on time, your score will improve along with theirs. If that isn't an option, consider a secured card, which works much like a credit card but allows you to deposit a sum of money with the card issuer that then functions as your credit limit. Choose one that will convert to a regular old credit card after 24 months of on-time payments. Or look for a credit or charge card that caters to consumers with credit scores that are on the lower end of the spectrum. The interest rate will be higher, but if you pay off your balance every month, that won't matter.

Finally, understand that building a credit history takes time. It generally takes a few months for each added credit account to show up in your file and your score.

Q: How can I evaluate my credit score? What is considered a credit good score?

A: Credit scores – whether calculated by FICO or VantageScore – range from 300 to 850. What is considered a good credit score depends on the lender, as each lender looks at your credit score differently and sets requirements for the products it offers. A credit score may be excellent in the eyes of one lender and only good in the eyes of another. In general, mortgage lenders require a score of 760 or above for the very best interest rates. Auto lenders may offer you their best rates at 740 or above. In all cases, the higher your score, the better. Credit card requirements vary widely, but there are cards – generally with high interest rates – available for even those scores that are considered poor.

Some lenders will only pull one score with your application for credit, while others, such as mortgage lenders, may pull all three – from VantageScore, FICO or both – and use the middle score to decide whether to approve you and at what interest rate. As a point of reference, the average FICO score in the country is 692; the average VantageScore is 667.

Q: What information is included on my credit report?

A: Your credit report is a fairly long document, so it helps to have a roadmap. It will include:

  • Personal information, like your name, address, Social Security number (or the last four digits of it), birthday, and employment history. You should always check that this information is up to date and accurate.
  • Account details for all of your credit accounts, including credit cards and loans. Each listing will include the date open, date closed (if applicable), balance and payment history, credit limit and other terms.
  • Inquiries, including a list of lenders who have pulled your credit file.
  • Public records, like liens, bankruptcies, judgements and any collection agency activity.

It will NOT include:

  • Your assets, like savings, checking or investment account balances.
  • Medical, criminal or vehicle records (though you will see information on medical debts).
  • Outdated information, including charged-off debts that are more than seven years old and bankruptcies that are more than ten years old.

Q: Does it hurt my credit to pull my credit report or credit score?

A: No. You can pull your credit report and credit score as often as you’d like (though you may, in some cases, pay to do so).

Q: How does it impact my credit when a lender pulls my credit report or score?

A: While pulling your score or report yourself does not harm your credit, if you apply for credit and a lender pulls your score in order to approve or deny your application, that can ding your score in some cases. Repeatedly applying for credit, particularly within a short period of time, can signal that you are in need of money or in some financial distress. Inquiries from potential lenders will show up on your credit report.

However, the credit scoring industry does understand that if you’re in the market for an auto loan or a mortgage, you’re likely going to want to shop for the best rates. For that reason, all inquiries from potential lenders for a specific purpose – like a mortgage – will be treated as one inquiry as long as they happen within the same 14-day window. If a lender pulls your credit due to no action on your part – in other words, you didn’t apply for credit, but they want to send you a pre-approved solicitation in the mail – it will not hurt your credit.

Q: How do I build my credit score if I am new to the United States?

A: Unfortunately, in most cases credit history does not transfer between countries, which means you’re virtually starting from scratch if you’re new to the United States. The good news is that if you have good credit in your country of origin, you likely already understand the behavior needed to start building a good credit history in the United States. And if you don’t, you’ll be able to leave that behind and start fresh.

There are several ways to build your credit score in the U.S.:

  • Open a credit card. If you are not approved for a credit card due to lack of credit history, you can start with a secured credit card, which allows you to make a small deposit with the issuing institution in exchange for a credit limit in that amount. You can use the card just like a regular credit card, making small charges and paying it off each billing cycle. The card will report that good behavior to the credit bureaus, helping you build a credit history. And with regular, responsible use, the secured card will automatically convert to a standard credit card in about 24 months.
  • Bank on existing relationships. If you have an international card from your home country, the issuer may give you a U.S. card based on that relationship, particularly if you've been a good customer. That new card will immediately begin reporting to the credit bureaus in the U.S., helping you establish a history. Be sure to pay your bill on time and keep your balances low.
  • Become an authorized user. If your spouse or another family member has established credit in this country and has a credit card, you can ask to be added as an authorized user. You will be issued a credit card in your name, linked to their account. When the primary cardholder pays the bill on time and practices responsible use of the card, it will be reported on their credit history and on yours. Note, however, that the opposite can be true as well: If you are the authorized user on an account that is paid late, under the FICO scoring system it will negatively impact your credit.
  • Leverage your past history. If you can print out a copy of your credit history from your home country, some small or local lenders may be willing to issue you credit based on that, particularly if you can talk to them in person and you have other things going for you, like a secure job. It’s certainly worth a try.

Finally, understand that while many credit resources in the U.S. are only available in English versions, there are a few Spanish-language options available:

Learn more about managing your credit after it is established with part two of our household guide to credit. Or, get answers to other credit questions in part three.

Part Two of a Household Guide to Credit: Proper Credit Management

Now that you’ve established a credit history, how do you better manage your credit to raise your score higher or keep it where it is? Jean Chatsky explains how to manage credit responsibly no matter where you are in life or where your score is right now.

Q: How do I keep my score high (or improve the score I have)?

A: Proper credit management is really a matter of doing just five things habitually:.

  1. Pay your bills on time, every time.
  2. Don’t use more than 10 percent to 30 percent of the credit you have available on your credit cards (on each card individually, as well as combined.) 
  3. Don’t close old cards (particularly the ones you’ve had the longest), as doing so will reduce the credit you have available and shorten your credit history, which can take down your score.
  4. Don’t apply for credit you don’t need.
  5. Try to establish a mix of credit – not just credit and charge cards, but utilities, car loans and mortgages (that you can afford, of course).


Q: How do I keep tabs on my credit?

A: There are two ways. First, familiarize yourself with annualcreditreport.com. This site was established by the three main credit bureaus (under an order from the government) to provide you with one free copy of your credit report from each bureau, each year for a total of three free reports annually. I suggest pulling one report every four months. Looking it over is a great way to make sure that all the information is not only accurate but also that it belongs to you. Information that seems to belong to someone else is a sign of identity theft (more on this momentarily).


You should also know what your credit score is. If you are not applying for a mortgage or car loan in the next six months, you can pull a free score from credit.com, savvymoney.com or creditkarma.com. All of these sites provide free versions of your VantageScore. If you are applying for a mortgage or car loan in the next six months, it is important for you to see the same score or score that your lender is looking at, which means you want to pull your VantageScore and your FICO score. Your FICO scores can be purchased from myfico.com for $19.95 for one bureau or $59.85 for scores from all three. Some credit card issuers, including American Express, may provide your FICO score for free, but it’s still wise to pull your score directly to ensure everything is being reported correctly. 


If you are turned down for credit, the law mandates the score used to make that decision be shared with you – for free.


Q: How many credit or charge cards should I have?

A: That’s a bit of a personal decision – you can have as many cards as you are able to manage wisely. That said, I generally believe you should have two. One should be a card with a low rate of interest in case you need to buy something that you will pay off over time. The second should be a card that gives you something back for using it – a reward like miles, points or cash. You should pay this card off every month and for that reason, should lump as much of your spending on this card as possible to maximize the rewards you’re able to earn. If you have a business, you may want a separate business credit card for accounting purposes.


Q: How do I decide which rewards are right for me?

A: This, too, is a personal decision. Rewards cards may have annual fees, which make them a little more expensive, so the first hurdle to clear is to make sure you're earning enough back in rewards to cover the cost of the card. The next question is what sort of rewards will you actually use? Frequent flyer miles are great for travelers, of course, but you may also be able to use them to pay for gift cards, merchandise at particular stores or tickets to events. You can also opt for a card that gives you actual cash back. There are even cards that will now deposit your rewards in retirement accounts or college savings accounts for your kids. The point is to know what you'll be getting – and that you'll actually use it – before you apply for a particular card. These perks have real value, so you don't want to waste them. 


Q: When should I use a credit or charge card versus a debit card?

A: It's a question you get asked at every cash register: Credit or debit? What you should pull out of your wallet depends on a few factors. Remember, a debit card pulls money out of your checking account immediately (or almost so) and a charge card must be paid off at the end of the billing cycle. Only the credit card gives you the option to pay off your balance over time. This can be helpful if you're talking about a large purchase that you can't afford to pay for over a single month. But it can also be expensive because you'll be paying interest every month you carry that balance. With those factors in mind, I'd break it down like this. If you can pay the balance off – use whatever card gives you the biggest rewards and the most in the way of consumer protections (some credit cards, for example, will give you extended warranty protection on whatever you’re buying which may come in handy if you’re purchasing a piece of technology or large appliance.). If you can't pay the balance off – consider whether you need to make the purchase now at all. If the answer is yes, use the credit card in your wallet that has the lowest interest rate. Finally, if you can pay the balance off but you haven't used your credit cards in a while, consider using them for a small purchase once a month and paying that balance off. This will help you build a credit history and keep the one you have in good shape. 


Q: When is it okay to close a credit card?

A: This is an important element of credit management since closing a card can negatively impact your credit score based on two factors in the credit scoring model:

  • Your utilization ratio, which reflects the amount of credit you have available to you (i.e. your credit limits) compared to the amount you are actually using (i.e. your balances). You want to keep this ratio below 30 percent; below 10 percent is ideal. When you close a card, you remove a line of credit, potentially bringing that utilization ratio up. 
  • Your credit history. When managing credit, the longer you've had it, the better, which means closing old cards in particular can harm your credit score by shortening the length of time you've had relationships with your current creditors.

Because of this, the general advice is to not close cards, even if you are no longer using them. However, there are two caveats: If the card carries an annual fee, you can go ahead and close it. And if you feel it will burn a hole in your pocket, tempting you into debt, you’re better off getting rid of it, too. If you do decide to close cards, close them one at a time, spacing out the closures by at least six months or so, and avoid closing an account immediately before applying for a major loan. 

Q: What sort of actions hurt my credit score?


A: There are several major actions that can damage your credit score:


  • Making late payments
  • Carrying high balances
  • Repeated inquiries into your credit history by creditors
  • Closing old cards

Try to avoid checking your credit score obsessively – it’s likely to vary a little bit, even month to month, depending on your credit card balances. For instance, if you purchase a large item on your credit card but plan to pay it off by the end of the billing cycle, checking your score while your balance is high could result in a slightly lower number than you’re used to since your utilization ratio is high. Once paid off, your score should revert to normal.


Q: How long will negative items stay on my credit report?

A: It is essential to know how to manage bad debt and credit errors. Late payments, Chapter 13 bankruptcies, foreclosures, collections and public records will stay on your credit report for seven years. Chapter 7 bankruptcies will stay on for 10 years, and unpaid tax liens can linger indefinitely. 


But here’s the good news: As these negative items get older, they become less and less important in the eyes of creditors, even though they’ll still display on your report. That means a bankruptcy last year may prevent you from receiving a credit card approval, but one three years ago may not. Many lenders focus on the last 24 months when it comes to negative items (positive items will continue to work for you indefinitely, as a lengthy credit history is good in the eyes of lenders). 


Q: What is considered a late payment?

A: Under the CARD Act, credit card bills must be due on the same day each month (under the CARD Act, your due date must be at least 21 days after your billing date). Payments received by 5 pm on the due date are considered on time. That said, a creditor can apply a late fee – which must be “reasonable and proportional” – to your account if you are even one day late with your payment. Creditors are generally not allowed to increase the interest rate on your existing balance unless you miss two consecutive payments. 


However, late fees are just one consequence of a late payment – more damaging can be the hit to your credit score. That said, most creditors will give you a grace period of 30 days after the due date before reporting your late payment to a credit bureau. And late payments are reported on your credit history in terms of how late they actually are – 30 days, 60 days, 90 days, and so on. The longer you’ve gone without paying, the more damaging it is for your credit score. Bottom line: Proper credit management means being sure you’re paying your bills on time, which in my mind means before the due date. One way to do that is to schedule automatic payments using your bank’s online bill pay platform. Another is to pay your bills as soon as they come in. 


Finally, one last note here: Just this year, the three credit reporting bureaus agreed to give consumers a little breathing room on medical debt, promising not to include late payments on medical bills until they were at least 180 days past due. This will help solve any issues that arise when an insurer – not you – is late paying the bill.

Q: What impact do store credit cards and items purchased on payments (like computers or furniture) have on my credit?

A: You’ve heard the pitch: Take home this TV today, and pay no interest for 12 months. Or sign up for this store credit card and get 10% off all purchases. These offers can be enticing, but in many cases the discounts – or payment plans – involved aren’t worth the potential impact on your credit. 


Store credit cards – also called retail credit cards – are not the same as major credit cards in the eyes of your credit report. They often have low limits, which means that even small purchases can increase your utilization ratio (the amount of debt you’re carrying compared with the amount of credit you have available). On a card with a $500 credit limit, a charge of $250 leaves you with a ratio of 50%, well over the 10 to 30% range for which you want to aim. 


There’s also a great deal of fine print involved. These cards and offers tend to have high interest rates, so if you do decide to carry a balance – or you’re not able to pay off a purchase during the no-interest period like you thought you would be – you’re likely to pay substantially more than if you had used another credit card in your wallet or paid in cash. In the case of deferred interest offers, the regular rate often applies retroactively to the entire original balance if not paid off by the end of the 0% promotional period, or if you make a late payment. 



Part Three of a Household Guide to Credit: Making Smart Credit Decisions

You’ve started building a credit history and managing everyday credit appropriately, but what about when credit decisions get more complicated? As your credit needs change and grow, you may find your credit questions getting more complicated and monitoring credit is not as simple as it once was. Get tips to manage more complex credit scenarios with the information below.

Q: Should my spouse and I have joint or separate cards?

A: There are actually three ways for married couples to have credit and charge cards.


  • Individual cards. In your name only. You are responsible for paying the bills. Payment history and other usage information is reported only on your credit report. 
  • Joint cards. In both names. You are both responsible for paying the bills. If one of you is not able to pay, the other person can be liable for 100 %. Payment history and other usage information is reported on both credit reports.
  • Primary cardholder with authorized user(s). Primary cardholder is responsible for paying the bills. Payment history and usage information is reported on the credit reports of both the primary cardholder and authorized user(s). 


Every person needs to establish credit – that much is clear. The problem with all of that credit being joint is that one spouse has the ability to run up debts that the marriage isn’t able to support – and take down the credit scores of both spouses as a result. The problem with maintaining only separate cards is that each of those cards may come with an individual annual fee. Thus, credit for the household may be more expensive than necessary. A better solution may be for you to be the primary cardholder (and your spouse an authorized user) on one card and your spouse the primary cardholder (with you an authorized user) on another. That way you have just two annual fees. But be careful only to hitch your wagon to a person you know to have good credit behavior. While VantageScore only reports positive information of the primary cardholder on the account of authorized users, FICO reports positive and negative alike.

Q: Is there any logic to applying for a loan or credit under only one person's name?

A: In some cases, yes. If after you marry, one spouse has substantially better credit than the other, applying for credit in that person's name alone is going to cost you – as a family – less. In order to get that loan or credit, the spouse applying is going to have to earn enough money on his or her own to qualify. But as long as you can clear that hurdle, it can be a very wise choice. Concurrently, the spouse with the not-so-good credit should be working at improving his or her credit score. As long as bills are paid on time and more money is paid off than borrowed, that person's score should move in the right direction.


Q: What are the right credit moves when you're getting divorced?

A: Just as you merged all or part of your financial lives when you got married, when you get divorced you have to separate them. Joint accounts should be closed. Before you do that, however, make sure that you have at least one credit or charge card in your own name. (See "Should my spouse or partner and I have joint or separate cards?" above.) Ask your card issuer if you have any additional credit questions around separating accounts after divorce.

Q: At what age should my child get a card of his or her own?

A: Under the CARD Act, your child can’t get a card in his or her own name until age 21 or until he or she is able to show enough income to support carrying the card. That said, you may not want to send a child off to college – or out into the world – without this sort of a safety net. In that case, consider adding your child to your account as an authorized user. (This is how I will build credit for my own children.) Authorized users get a card of their own, in their own name and the history of payments gets reported to the credit bureaus on their behalf (so it helps build credit). What they do not have is responsibility for making payments. That falls on you. So if you’re trying to teach your child a lesson in fiscal responsibility, make sure that they pay you on a monthly basis – just like they’d have to pay the card company.

For more information and answers to credit questions, review our tips for young adults with credit cards.

Q: What if there is a mistake on my credit report?

A: You should immediately go through the process of correcting the information by filing a dispute with each of the three credit bureaus. Their contact information is as follows:


  • Equifax: 1-800-525-6285; www.equifax.com
  • Experian: 1-888-397-3742; www.experian.com
  • TransUnion: 1-800-680-7289; www.transunion.com


This process was improved this year when the three credit bureaus agreed to have actual trained investigators oversee the dispute process, rather than relying on computers which often left consumers feeling frustrated and unserved.

Q: I’ve been hearing a lot recently about data breaches. Should I be concerned about my credit data and identity theft?

A: It’s the sad reality right now that data breaches seem to be in the news nearly every day. In fact, most experts say that even if you don’t think you’ve been impacted by a breach, you should assume that at least some of your personal data is out there. 


Your credit decisions in reaction to a data breach depend on what sort of information has been stolen. Of course, you always want to closely monitor your credit report, which you can do by pulling a free copy from annualcreditreport.com every four months (one from each of the three credit bureaus per year). But if it’s your credit or debit card number that ends up in the hands of a thief, your credit report isn’t going to be your first indication – your card’s account history will be, so be sure to be carefully and consistently monitoring your credit statement and report any fraud to your card issuer immediately. You won’t be held responsible for losses, and you can cancel the card and ask for a replacement if necessary. 


If, on the other hand, your Social Security number has been stolen, you have a larger problem on your hands. You’ll need to carefully monitor your credit report (and your mail) to make sure new accounts aren’t being opened in your name. Noticing that someone has stolen your identity is key to fixing the problem. And you can put a few protections in place to help you.


  • Attach a fraud alert to your credit file. A fraud alert sends a signal to any creditor who pulls your file in an attempt to issue new credit; they are then supposed to contact you – typically by phone – to make sure you are actually the one who has applied for credit. Note: Initial fraud alerts only last 90 days, and they only require creditors to use “reasonable policies and procedures” to verify your identity before issuing credit in your name. If that doesn’t sound strong enough, you may want an extended fraud alert (which will last 7 years, but requires proof that you’ve been a victim of id theft) or a credit freeze instead.
  • Request a credit freeze. This blocks creditors from gaining access to your report at all. Like the name implies, you’re putting your information in a block of ice, making it unlikely that a thief will be able to open new accounts in your name. Credit freezes are regulated by state law. In some states, anyone can implement a freeze; in others, you have to be a victim. Some states may also charge a fee for putting a freeze on your account if you’re not a victim, generally $10 or less for each credit-reporting bureau (you need to freeze your report at all three; otherwise, there’s no point). But understand that if you apply for credit, you’ll need to unfreeze your reports before you apply (which may cost another $10) and refreeze after ($10 again). 

Q: Can I request to have negative items removed from my credit report?

A: Generally, negative items like unpaid debts stay on your credit report for seven years. If you are negotiating with a debt collector over an unpaid debt, you can ask that the negative item be removed from your credit report or marked as “paid in full” as part of the negotiation. If you feel your report contains information that is inaccurate or incomplete, you can file a dispute with each of the credit bureaus reporting the inaccurate information. 


Q: Do I need identity monitoring on my credit report?


A: That depends. Do you want to put in the work to stay on top of your own credit, by regularly (and carefully) scanning your account transactions to make sure they’re legit and keeping up to date on your credit report and any inaccuracies or fraudulent activity? If so, you can probably skip the credit monitoring (though, if your information is part of a data breach and you’re offered monitoring services for free, there’s no reason not to take it). To be extra cautious, you can place a fraud alert on your account, as referenced earlier. It will last for 90 days and entitles you to a copy of your credit report from each of the three credit bureaus. 


If, on the other hand, you’re the type to let things slide, it helps to have someone watching your back. Credit and identity monitoring services run the gamut from free offerings that track your report and notify you of any significant changes, to paid services that monitor inquiries to your credit file in real time, scan for threats, track your credit score, and guarantee protection with up to $1 million to recover your identity if you fall victim. That level of monitoring starts at around $10 a month. 


Q: How do I read my credit report?

A: The first time you pull a copy of your credit report, it can seem confusing – there’s a lot of information, particularly if you’ve been a user of credit for many years. Here’s how to read a credit report:


  1. Personal information. Your name, other names (if you’ve married and changed your last name, for instance), date of birth, phone number, current and previous addresses, and any employment data that has been reported. You can opt for the credit report to include your full Social Security Number or just the last four digits. Check to be sure all of the information is – or at one point was – accurate. 
  2. Accounts. The report will list all of your past and current credit accounts, including credit cards, mortgages, student loans, auto notes and others. Go through each carefully and make sure that the information included is accurate and belongs to you – account numbers, status (open or closed), loan amount or credit limit, monthly payments, and payment history, which is important and indicates whether you’ve paid on time. Closed or paid off accounts will continue to be listed for up to ten years. 
  3. Inquiries. These are records of lenders and other creditors who have looked at your credit report, and they are divided into two categories, often called “hard” and “soft” inquiries. Hard inquiries are shared with companies that view your credit report and are a result of an action you took – for instance, applying for a new credit card or loan. Soft inquiries are shared only with you and are not a result of action you’ve taken. They are caused by companies that view your credit before extending an unsolicited offer to you – for instance, when you receive a pre-approved credit card offer in the mail, that creditor has likely checked your credit. Those inquiries do not count against you. 
  4. Public records. If you have any on your file – judgements, liens, bankruptcy – they will be listed on your report. 

Reach out to the credit bureau in question if you have any concerns about what you see on your credit report.

Jean Chatsky

Jean Chatzky is an award winning personal finance expert and bestselling author. Jean's just published title, Not Your Parents' Money Book: Making, Saving and Spending Your Own Money, addresses exactly what kids want and need to know about money. Other recent books from Jean include: Money 911, Pay it Down!, The Difference and Make Money Not Excuses. Jean appears on television, is a columnist for the NY Daily News and her articles have appeared in publications including USA Weekend, Newsweek and Money. Jean lives in Westchester County, New York with her husband and two children, and is a passionate advocate for financial literacy who believes every child should learn about money both in school and at home.

jeanchatsky.comlink to Jean Chatsky's website