What Matters on Your Credit Report: 4 Red Flags

March 22, 2022

Do you know what to look for on your credit report? If not, don’t panic. Most people have no idea. If you’re not sure what matters most on your credit report, we want to help you fix that. In this article, we will tell you what matters most and the 4 major red flags that everyone should be looking for on their credit report.


First, let’s look at why you should check your credit report to begin with. For starters, it’s pretty much your financial report card, or as others call it, your financial resume. In other words, it shows how you behave when you borrow money. This tells lenders and other creditors how much to trust you when you need a loan or any time you need to borrow money. Why does this matter?

Without a good credit history, most people can’t get into a new home, buy a new car, or even get employed in some cases. On top of that, there is a whole list of people who may want to check your credit for a number of reasons, including:

  • Banks
  • Creditors
  • Lenders
  • Insurance companies
  • Potential landlords
  • Collections agencies
  • Potential employers
  • Government

With that being said, staying up to date on your credit report and its history is very, very important. That is of course, unless you don’t know what to look for on your report. Which brings us to the 4 red flags to know when reviewing your credit report.

4 Big Red Flags On Your Credit Report to Watch For


Although this section should be the easiest to understand, sometimes it can be the most overlooked. While you might assume all of your personal information on your credit report is correct, you would be surprised at how many people have inaccurate information on their report.

In fact, the Federal Trade Commission (FTC) stated that on average 1 in every 5 people has a mistake on their credit report. That’s insane! If you have a mistake on your report, you can always dispute it on your own or ask a professional like My Credit Guy to help you fix it.

Even though mistakes on your personal information don’t affect your credit score, it can still cause major issues. For example, having incorrect personal information can be a strong indicator of fraud. That means someone else could be using your identity to take out loans, credit cards, or do other things in your name illegally.

If knowing this isn’t enough to make you check your credit report, maybe this next red flag will.


The next big red flag to watch for on your credit report is derogatory remarks. While personal information errors don’t affect your score, derogatory marks certainly will. Here are some examples of derogatory remarks to keep an eye out for on your report.

Late pays

We always like to say, “there’s no such thing as a little late pay”, and it couldn’t be more true. Whether it’s a late payment on a mortgage collection or a 5 dollar late charge on a credit card, late payments hurt you all the same.

Charge offs

If you’ve missed a payment for long enough, typically 6 months, the company you owe might have charged off your debt. When this happens to you, two things will change on your credit report: The balance you owed will go to zero, and there will be a new entry that will appear under “Collections”.  Which brings us to the next derogatory mark to look for: Items in collection status.


After an account hasn’t been paid and is charged off, the creditor will send it to a collections agency. In other words, the money you owed is no longer being collected by the original creditor, and is now marked as an unpaid debt on your credit report. Collections can wreak havoc on your credit score, especially if you pay them off at the wrong time!


Oftentimes, there can be errors left over on your credit report after a bankruptcy. When bankruptcy happens, it is incredibly important to stay up to date on how those appear and that they are reporting correctly on your report. Otherwise, it can cause major issues down the road. Learn more about your credit and Life After Bankruptcy here.


When checking your credit report, it is always important to check your utilization. One way to define your utilization is the amount of credit you have used versus how much is available. An example would be if you had a credit card with a 1,000 dollar limit, however much you have charged on your card is your utilization. What does good credit utilization look like though?

People who have good credit utilization typically are using less than 30% of their total limit. To give you an example, that $1,000 limit credit card shouldn’t have a balance any higher than $300. In a perfect world, we would even recommend you try to get your balance between 5- 10% for maximum points.


You might have noticed we already mentioned payment history above, and that’s not a mistake. In the credit world, we consider payment history to be so important that we can’t emphasize it enough. That’s because late payments are notorious for being one of the easiest ways to quickly destroy your credit score.

On top of that, your payment history accounts for 35% of your overall credit score. That’s more than anything else that factors into your credit score! Since late payments are weighted so heavily on your credit score, we highly recommend making your payments on time and keeping an eye out for late payments on your credit report.


Credit Reports can be a bit confusing, and we totally get it. At first, it might look like a long list of charts, lists, and pointless information. The thing is though, your information and history on your credit report tell a story, and it’s your job to be aware of what that story is.


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