How to Read an Equifax Credit Report

How to Read an Equifax Credit Report
Equifax compiles reports based on information from banks and lenders.

Personal Information

The first section of the report contains basic personal information such as your name, Social Security number and date of birth. Also included are annotations detailing aliases, and other names that you've used in the past. The report details current and former addresses you've used as well as employment history. Equifax uses a variety of codes to distinguish types of data. For example, the code ES identifies your current employer while EF appears beside the name of your former employer. You'll also notice the abbreviation RPT or RPTD and a date beside most of the information. This simply means the details in question were reported to Equifax on that date.

Active Accounts

Your credit report contains a list of all your active accounts. This includes car loans, mortgages, student loans, credit cards and store cards. For each account you'll see a last reported date or RPT, current balance, highest balance, monthly payment and an account number. The letter I denotes installment loans such as mortgages that have a fixed term, while R identifies open-ended revolving debts such as credit cards. For every account, Equifax tracks a 24-month payment history with numbers ranging from 0 to 9. The code R0 denotes a revolving account that has been paid as agreed. R2 signifies a revolving debt that's 31 days or more past due. The code R8 means the loan ended in foreclosure or repossession.

Scores

Based on your credit report, Equifax assigns you a credit score. Scores range from a high of 850 to a low of 300. Most lenders regard a score in the high 600s as good. With this type of score you can get a mortgage, finance a car and open credit cards. Below this point, financing becomes harder to obtain, meaning you might need a cosigner. Scores below 600 are regarded as sub-prime or high-risk. At best sub-prime borrowers can obtain high interest rate debts; at worst they have no access to credit. Conversely, a score in the 800s entitles you to the lowest possible interest rates. Late payments, foreclosures and past due accounts negatively affect your score. Although your score is tied to your credit report, you can view your credit report once a year for free but generally must pay a fee to see your actual score.

Inquiries

Credit agencies associate credit applications with risk. Whenever you take on a new debt, there's a risk you might find yourself unable to handle the burden. When you apply for credit, lenders obtain credit reports from Equifax and other credit bureaus. A list of credit inquiries within the last 24 months appears on your credit report. Excessive inquiries can negatively impact your credit score. Inquiries can also raise eyebrows with lenders. For example, if 10 mortgage companies have checked your credit, are you shopping for rates or trying to simultaneously buy 10 homes?

Additional Information

Among other things, lenders use your credit report to verify your identity. Discrepancies and inconsistencies are noted. For example, if you frequently move, your lenders will provide Equifax with a variety of residential addresses. Equifax may place an address discrepancy message on your report. Active duty military personnel may see the word "military" listed among biographical data. This is recorded as a way of explaining frequent address changes common for people in the military. If conflicting information raises red flags, Equifax may place a fraud alert on your report. This means you may have to take extra steps to verify your identity when applying for credit.