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How to read a Personal Credit Report

4.  Asset Summary:  This section of the credit report is a summary of the detailed account listings that comes up later.  In this section of the report, all your credit relationships are summarized and categorized for a snap-shot view.  The types of accounts section breaks down the credit relationship into real estate loans, installment loans like auto, revolving loans like credit cards, public records like judgments or bankruptcies and other items.  The data is summarized under the section entitled “count” that shows numbers or accounts, total balances under each category and monthly payments for each category.

5.  Adverse Information:  Here all the derogatory information that affects your credit scores is summarized.  Late payments are categorized as between 30 to 59 days late, 60-89 days late and 90+ days late.  This is where the rubber meets the road and all the derogatory information on your credit shows up.

6.  Revolving Debt to Limit Ratio:  This ratio calculates the total outstanding balances on your revolving debt to the total debt available to you.  For more on this read our section entitled utilization of credit.  Bottom line – the lower this number the better it is for your credit scores and the better are your chances of obtaining new financing.

7.  Under the detailed reporting section – this item points to the name of the lender reporting the credit history.  Also mentioned is the account number – it is important to note that many times credit bureaus will only show the first few numbers or part of the entire account number – this is to protect you.  Try and match up the numbers to the actual numbers that you have and make sure that the account numbers are the same.

8.  Date Opened is the date the account was opened with the lender – as we mentioned, the older the account is the more value it has in terms of established credit history and we recommend that you hold on to your old credit accounts.  Date Reported is the date on which the credit line is being reported on – this typically falls at the end of the month.  Thus if you were to obtain a credit report on March 15th, the date reported on most credit accounts would be the prior month end of February.

9.  High balance refers to the maximum balance that you have had with that particular creditor.  In the event of a car loan or mortgage loan it will of course be the original loan amount you took out.  In the event of a credit card or other revolving loans it will be the maximum amount you charged and had outstanding at the end of any billing cycle.

10.  Reviewed is the section that points to how many months that account has been reviewed – this is what shows the age of the account.

11.  The last active section denotes when the account was last used and when the credit that is available to you under this account was last reported.  Thus if you have an active account that has not been used since September 2004 the last active date on the bureau will be 09/2004.

12.  Agency refers to the name of the data repositories that this credit line is being reported to.  Most credit lines are reported to all three repositories by the lenders but often you will come across information that is only reported to two or one repository – in many instances this results in a different credit scores.

13.  High Credit refers to the maximum credit limit that is allowed to you under that particular line with the lender.  If the lender increases your line of credit it will be reflected here as well.

14.  This items deals with the kind of credit line you have with the lender.  As discussed earlier, it could be Revolving, installment, mortgage or other.

15.  Payment history is the history of payment for just that particular account.  If you have a late payment on the account it will show up here.  It is important to note that some lenders (including American Express) will not report your 30 day late payments to the credit bureau, but if you are more than 60 days late, they will report that and all the 30 day late payments to the bureau.  Also important here is to understand the concept of rolling late payments – if you have been late for more than 90 days on a payment to a creditor, it will show up as a 30 day late, a 60 day late as well as a 90 day late.  Sometimes you may be able to work with a lender and have one or two of these parts of the late payment removed.  Refer to our section about correcting derogatory information on your credit report for more details.

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Articles on the Small Business Financing Sources, the Small Business Loan Basics, small business loans Checklist and SBA Loans are incredible sources of knowledge for the small business owner.



Credit Report and Credit Score Analysis, how to Read a Personal Credit Report and all about Business Credit cover the intricacies of credit and are required reading for everybody.



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