When you pull your free credit report, you may look at it and go: How do I read this? Or what does this mean? Read on to find out just how you read your credit report and what information you need to have - because your creditors do.

There are three main credit reporting agencies: Experian, TransUnion and Equifax. Each has it's own way of doing things. But basically, a credit report is divided into four sections: identifying information, credit history, public records and inquiries. We'll take each one separately to explain them.

The identifying information includes quite a bit. Your name, addresses you've lived at, phone numbers, social security numbers, spouse's name, the name of your employer, etc. There will be some variations(read mistakes) of this information listed with the correct information because it was reported wrong by one of your creditors. It's okay, the credit reporting agency will keep it for future reporting and knows it's just a variation.

Your credit history will list all of the creditors, your account numbers, total amount of the loan or account, how much you still owe, who is on the loan with you, the status of the account, credit limits, and how well you pay them, or if you didn't. It will also list the last time the creditor updated his/her information on this account. Depending on your report, the information on how well you pay is in plain English or it can be numerical. Numbers 0 - 9 are used, 0 or 1 being very good and 9 being very poor. Other things you may see are an O, R or I , which stands for open account, revolving account or installment account. Two words you don't want to see is charged off or default. This means that the creditor has given up getting any type of payment from you.

The public records section is where the credit reporting agencies list bankruptcies, judgments and tax liens. Having something listed in this section means you defaulted and worse, someone needed to have a judgment placed against you to get you to pay or you went into bankruptcy. If this section is clean, that's good.

The inquiries section is where all 'looks into' your credit report are listed. There are two types of inquiries: hard inquiries and soft inquiries. Hard inquiries are ones that you initiate by filling out credit applications. Soft inquires are all of those free credit offers who check to see if they should make you a credit offer.

You will also get a form or instructions with your credit report to report back any discrepancy you have with the report. Look it over, mistakes happen. If your credit report has a mistake, dispute it. While it is in dispute it will show on your report. The creditor has 30 days in which to answer your dispute with the credit reporting agency and then it is fixed.