Credit Report Testimonial

A Personal Look at a Credit Report

My friend Beth was always trying to get me to host one of her make-up parties. She said they were fun and there would be no pressure to buy. Beth and I are great friends, but we have pretty different outlooks on life.

Getting her to talk about anything serious is a struggle. I walked into her house one day and accidentally overheard her telephone conversation. From what she was saying it sounded like she'd been turned down for another loan. I tried to bring it up when we were out for drinks the next evening, but she kept changing the subject back to her make-up parties. That's when I realized that I could help Beth by giving into her. I agreed to host one of her parties, but on the condition that I would be able to host an additional hour of the party after she was finished.

Two weeks later, six of us were sitting around the kitchen table finishing our makeovers and snapping Polaroids of each other. Beth thanked everyone for coming and then turned the party over to me. I offered refreshments and invited everyone to come into the living room.

That's when I announced that the second half of the party would be all about reading our own credit reports. I asked each of my guests when she had last seen her credit report. The most recent was a little more than a year ago.

I assured everyone that no one else would see their personal information. I had set up the computer in my home office to a website where each guest could privately enter her information and receive a free copy of her report. We would go in separately, print our report and then return to the living room to review our information. I had spaced the chairs far enough apart so that everyone would have privacy while reading their report.

Once each guest was seated in a chair, with her credit reports in hand, I began to explain how to read the report. "The first section contains your personal information including your name, address and social security number. You need to make sure all your information is accurate. This ensures the credit bureaus know where to find you and can help defend you against identity theft."

We continued into the next section, and I explained, "The second section is your credit summary. You should find all your past and current information here including credit accounts such as credit cards, loans and mortgages. Make sure you recognize each account and that the information about how much you owe is accurate. Your report should also note if an account has been closed. If not, you may want to contact that creditor and formally request that the account be closed. Open accounts that you're not using make you an easier target for fraud."

I talked next about the inquiries section on the report that showed both "hard" and "soft" inquiries, that is inquiries made as part of applying for credit such as a credit card or loan as opposed to "soft" inquiries made by the consumer herself or by institutions sending promotional mail offers or offering "pre-qualified" status to the consumer. I stressed that this was another important section since any hard inquiries that they had not authorized could be an indication of fraud.

In the public records section, I said, my guests would find any bankruptcies, tax liens and judgments against them. The items could negatively affect their credit if unpaid. The next section, collections, was another negative area. Items in this section such as repossessions, unpaid debts and accounts turned over to collections agencies could remain on their report for up to seven years and do some of the greatest harm to their scores.

The last section, I explained was important if they had found any errors at all on their report. "It's the dispute file section, and you should use it to request an update or correction of any inaccurate information. Remember, this is how creditors, mortgage companies and sometimes even potential employers see you. It's crucial that your credit report be a fair and accurate representation of you."

I received a good deal of thanks as my guests left. Beth was looking a little sheepish, but when I went to say goodbye to her she thanked me. "I was always scared to look at my credit report," she admitted. "Now that I know what I need to work on, it's not so intimidating." They were exactly the words I'd hoped to hear from Beth. I don't know if she'll ever ask me to host another of her parties again, but after this positive experience, I don't think I'm through hosting mine.