Your credit score is a number. Your credit report is the story behind that number. The report contains the detailed history of every credit account you have had, every payment, every inquiry, and any negative marks. You are entitled to free reports from all three major bureaus, Equifax, Experian, and TransUnion, through annualcreditreport.com, and reviewing them once a year is one of the more useful financial habits you can build.
What a credit report contains
A credit report is organized into sections. Personal information includes your name, addresses, Social Security number, and employment history. The accounts section lists every credit card, loan, mortgage, and line of credit, open and closed. For each account it shows the creditor name, account type, date opened, credit limit or loan amount, current balance, payment status, and payment history going back up to seven years. Public records may include bankruptcies. The inquiries section shows who has pulled your credit recently.
Check your personal information first
Errors in personal information are common and sometimes indicate identity theft or mixed files, where your information has been confused with someone else's. Check that your name is spelled correctly, that addresses listed are places you have actually lived, and that your Social Security number is accurate. An unfamiliar address or a Social Security number with a digit off can cause real problems and should be disputed.
Look for accounts you do not recognize
An account in your name that you did not open is the clearest sign of identity theft. Go through the accounts section carefully and flag anything unfamiliar. Sometimes the name on the report differs slightly from what you know, like a store brand name instead of the bank that issues the card, so look at the creditor type and amount as well as the name. If something does not match anything in your financial history, it needs investigation.
Verify payment histories on accounts you do recognize
Even accounts you opened can have errors in the payment history. A payment reported as 30 days late when you paid on time is more common than it should be. Late payment marks stay on your report for seven years and have a significant impact on your score, so it is worth checking each account's history against your own records if your score seems lower than your payment behavior would suggest.
How to dispute an error
Each bureau has an online dispute process through their website. You submit the disputed item, explain the error, and attach any supporting documentation you have. The bureau is required to investigate and respond within 30 days. If the furnisher cannot verify the information, the bureau must remove it. Disputing the same error with all three bureaus separately is necessary because they operate independently and a correction at one does not automatically carry to the others.