Your credit report contains information about your financial actions and is your financial report card on how well you manage credit. If you have no credit (never took out a loan or obtained a credit card that reports to a bureau), then you have no score or a low score. If you have used credit, your credit report shows other creditors and lenders how well you managed each line of credit.

It has always been important for consumers to order a credit report yearly, and now the government has made it possible for you to obtain an annual free credit report.

Ordering the report is the first step. Next, you need to learn how to read credit report information and entries otherwise you may never be able to establish or improve bad credit. Here are explanations of each section of a credit report:

Personal Information Section:

Your personal credit report information includes your name, address, place of employment, and your previous addresses and employment may also be included. It's not uncommon to see variations or misspellings of your name or the name of your spouse for joint credit. Most credit reporting agencies leave these variations to maintain the link between your identity and the credit information. Just make sure any variations; as well as accurate spellings, are all identifying you and not someone else.

Credit Summary Section:

This section summarizes information about the different types of credit accounts you have. It lists the total number, balance, number of current and number of delinquent accounts, including:

• Real estate accounts, any mortgages that you have
• Revolving accounts, like credit cards and lines of credit
• Installment accounts, like loans
• Other accounts
• Collection accounts

Your credit summary will also summarize the number of accounts you have open, closed, in public records, and the number of inquiries made against your credit within the past two years.

Account History Section:

This section contains the bulk of your credit information, listing each of your credit accounts and details about how you've paid. Check this section thoroughly to make sure the information is being reported correctly and without errors. Each line of credit will have:

• Creditor name (or name of the company/institution) reporting the information.
• Account number (which may be scrambled or shortened for privacy and protection).
• Account Type (whether a revolving account, an education loan, a mortgage, etc).
• Responsibility (whether you have individual, joint, or authorized user responsibility for the account).
• Monthly payment (the minimum amount you're required to pay monthly).
• Date opened (month and year the account was established).
• Date reported (last date the creditor updated the account information with the credit bureau).
• Balance (amount still owed on the account at the time data was reported).
• Credit limit or loan amount.
• High balance or high credit (the highest amount ever charged on the credit card; such as the original full loan amount).
• Past due (amount past due at the time the data was reported).
• Remarks (comments made by the creditor about your account).
• Payment status (whether payments are current, past due, or there was a charge-off. Even if your account is current, it might contain information about previous delinquencies).
• Payment history (your monthly payment status since the time your account was established).

Collection accounts may appear as part of the account history or in a separate section. Where it appears depends on the company providing your credit report.

Public Records Section:

This section includes information such as bankruptcies, judgments, tax liens, state and country court records and; in some states, overdue child support. Depending on the type of account, a public record can remain on your credit report between 7-10 years. Only severe financial blunders appear in this section, not criminal arrests or convictions. Because public records can severely damage your credit, it's best to keep this section clear.

Credit InquirySection:

This section lists all parties who have accessed your credit report within the past two years (soft and hard inquiries). Typically only hard inquiries will be revealed on the lenders' and creditors' versions, whereas your version will list both hard and soft inquiries.

• Hard inquiries: from lenders; such as a credit card company reviewing your credit report because you applied for their card.
• Soft inquiries: from lenders; such as a credit card company, who's previewing your credit report because they want to offer you a credit card although you have not applied.