This article is part of the How to Read Your Annual Credit Report series.
Knowing how to read your credit report is an important factor to taking control of your finances. The first step is to request your credit report file, and to make it easier for you we have created a step-by-step tutorial on how to obtain your free annual credit report.
Let’s begin with the Account History section which may not be the first thing you’ll see when you open your credit report, but it is the most important. It’s usually the largest section of the report, as well. When calculating your credit score, FICO gives more weight to your payment history than any other category; it’s responsible for 35% of your score.
When looking at your credit report’s Account History section, you’ll see a summary of each of your credit accounts, including accounts that have been closed. They may be separated into different sections depending on whether they have a negative or a positive impact on your credit, whether the accounts are in collection, or other factors. Accounts are usually divided into five categories—Real Estate, Revolving, Installment, Other, and Collection.
For each account, you’ll find the following information:
Name of Creditor: The abbreviated name of the the person or agency that gave you the credit account, such as a bank, credit card company, or mortgage lender.
Address of Creditor: The official address of the creditor to send correspondence to.
Original Creditor: This section will only appear if the account is in collections.
Account Number: An identifying number for your account. Typically, this would be a credit card number for a credit card account, or a loan identification number for a mortgage.
Type: The type of account such as Real Estate, Revolving, Installment, Other, and Collection.
Status: Shows the state of the account, such as open, paid, closed, past due, etc.
Responsibility: The role that you play in the account. For example, “Individual” or “Joint.”
Date Opened: The date when the account was opened.
Date Reported The last date when any activity in this account was shown. Activities include payments, credit card billings, etc. Very recent activities may not yet show on your account, since it takes time for them to appear in the bureaus’ computer system.
Credit Balance and Limit: The amount you presently owe on the account (based on the last reported activity) compared to the maximum amount of credit approved. Very recent activities may not yet have appeared in the bureaus’ computer system, so this balance may be a few days out-of-date.
High Balance: The most you have ever owed on this account. In the case of a credit card, for example, this would be the highest balance you’ve ever accumulated. For a mortgage, it would be the initial amount of the mortgage, not the current paid-down principal.
Recent Balance: The most recent balance as reported to the credit bureau.
Payment and Terms: The amount and number of monthly payments scheduled.
Past Due: The amount of payment overdue as of the most recent reported activity. Very recent payments may take a few days to appear on your credit report.
Remarks: If there are any remarks by you or your creditor included in the account information, these remarks will appear here.
Account History: Your account history shows how many late payments you’ve had, how late they were (30, 60, 90+ days), and what your balances have been from month to month.
You should check all the information in this section to ensure that it is accurate and has bee properly updated. The most important part is the “account history” part; it’s crucial that you tackle the negative items in this section by creating a plan to bring all past due amounts current, and to establish a good payment history going forward.
If anything in this section appears to be incorrect, you can write a letter to the credit bureaus requesting they correct any errors. See our free Consumer Guide to Good Credit for complete instructions on disputing out of date or inaccurate items on your credit report.
Note: The visual format of your credit report file will differ depending on credit reporting bureau that you request your report from. To make it easier to understand the differences, you may download the following sample credit report files (PDF): Equifax, Transunion, Experian