Credit Report: Are all those debts really yours?

How do you eat an elephant?  One bite at a time.

Let me be perfectly honest here, when I first started out on my financial journey, the hardest thing (by far) was to START.  Truth was, I was in no hurry to look at the disaster that was also known as “my life“.  I was in less of a hurry to document where my paycheck was going every month.  Initially I was trying to do everything by myself.

It was all so overwhelming!!!

Then, one day, I was ready.  I started small (my first bite of the elephant) and ran my credit report using  I picked them because they pull from all three credit companies (Equifax, TransUnion and Experian) in one site for free.  Convenient and free.  Can't beat that.  Oh, but they did.  Annual Credit Report is easy, free, convenient AND let's you pull your credit report every 12 months.  BOOM goes the dynamite!  That's right… same time next year, do it all over again… for free.  Love IT!

Wait!  Did I mention Annual Credit Report gives you the option to run all 3 credit reports or pick just one.  Now why is this important?  In a word, flexibility.

Lets say you have a lot of debt and are going to focus the year on paying it off.

Strategy 1: Run all 3 credit reports and analyze similarities & differences.  Make game plan and begin payments.  In 12 months, run them again to see what is left.  This strategy works well if you have not run your credit report in years and want a full and complete picture.  Not all reports are created equal.

Strategy 2: Run 1 credit report every 4 months to maximize the best debt repayment for your situation.  This is a great method to use when you have a lot of small debts and are looking to leverage a short timeframe.

Regardless of which strategy you use, the first thing you should definitely do when pulling your first report is check for mistakes or identity theft.  If its listed on your credit report, its your responsibility.  Its estimated that 1 in 5 will find a mistake on their credit report.

Find those mistakes and get rid of any debt that is NOT yours.  Right off the bat this one move can directly impact your credit score for the better.

TRUE or FALSE: Credit Reports contain Credit Scores.

Credit Reports are generally divided up into 4 different sections: general information, credit history, public records and inquiries.  No credit scores.

General Information lists your legal name (and all its variations), places you have lived in the last 10 years.  It may also list, phone numbers, date of birth, spouses.

Credit History is where most people spend their time.  Depending on the credit company the following information is listed: type of credit, credit limit, amount owed, payments made (possibly even the amount), company, address, phone, if you pay on time and how often.  “Charged Off” means the creditor has written off the debt as a loss and is no longer seeking payment.

Public Records is the area you definitely want to keep clean.  Here is listed any bankruptcies, tax-lien, and any other financially-related indiscretions.  It does not list if you have a prison record.

Inquiries lists the number of companies that have pulled your credit history.  There are “soft” and “hard” inquiries.  Soft inquiries are when a company pulls high level information to get a sense if you are a good risk, usually used for small loans.  Soft inquiries do not impact your credit score.  Hard inquiries do a deep dive into your credit history usually done for a home mortgage.  Hard inquiries do impact your credit score.  Stay away from multiple hard inquiries as it can really eat away at your credit.

So there yo Grab Your Slice u have it your first bite of the elephant.

Remember, its just a point in time and does not define who you are.

How do you think you are doing?  Is it better or worse than what you thought?  Write it in the comments below.  I would love to hear from you!

When you are ready, move to Step 2: Calculate Net Worth.

Grab Your Slice,

Pie Lady