By now, you should have seen or at least heard of the government program ensuring every American has access to free credit reports. Every year, you can access your credit reports with Equifax, Experian and TransUnion free of charge through the government’s free credit report Web site.
Be sure to print copies of all three credit reports. While it seems logical that the three reports contain the same information, you’ll frequently find discrepancies between them.
This comprehensive credit report includes your personal information (employment history, residence, etc.), owed debt and payment history for any open and closed accounts. One thing that is not provided with your credit report is a credit score. Equifax, Experian and TransUnion require an additional payment to provide you with a credit score.
Nonetheless, some financial institutions, banks and credit unions, will provide your credit score if you ask. You can save money and access your credit score without having to pay any additional fee if your bank or credit union offers that complimentary service.
Breaking Down a Credit Report
Equifax, Experian and TransUnion use different formats for their free annual credit reports. It may take a minute to familiarize yourself with the layout. The three reports begin with your personal information. Here you’ll find information about yourself including your employment history, residential history, date of birth, your social security number and possibly your driver’s license information.
Mistakes in the personal section often occur in the length of employment. This is especially true if your employer changes owners. An example of a common mistake involves a company that changed owners four years ago. While you may have worked for a company for twenty years, you find your employment history shows four years because of the ownership change.
Next is information regarding your credit history. You’ll receive a list of your secured debt (car loans, mortgages, home equity loans) and your unsecured debt (credit cards, student loans). With each company is a record of the past two-year’s payment history. The goal is to show no late payments.
In the credit history section, verify the amounts of debt, the length the account has been open, that late payments were truly late and that you recognized each open and closed account. Late payments are something you do not want showing up in this section!
With luck, your public record’s section is empty. Foreclosures, bankruptcies, tax liens and court judgments appear in this section. Having an entry in the public record’s section is the kiss of death for most people. If you do have entries here, make sure they’re removed when the time limit has passed. Bankruptcy listings disappear after ten years. Tax liens and other negative credit entries can stay on your credit report for seven years. Federal and state laws dictate these lengths so they may vary.
Finally, the fourth section of a credit report includes all the inquiries people have made into your credit report in the past year. You’ll discover exactly who is looking at your records and when they last accessed it. This section includes “hard” and “soft” entries. Hard entries occur when you apply for a loan. “Soft” ones are those done by companies using your credit report to establish interest rates or offers. Typically, the hard entries are the only ones that will affect your credit score, so try to keep those to a minimum.
If your credit report has a credit score, it’s usually at the top of the report. Remember that you want a 700 or better. The average credit score in the U.S. is current at 692 (April 2009). If your score is lower than you would like, focus on easy ways to improve your score.
Reporting Errors
The most important thing to look for on a credit report is accurate details. Late payments drag down your credit score, so verify that any notification of a late payment was, in fact, late. If you have proof you paid on time, bring that to the credit reporting bureaus attention. This can help improve your credit score.
Also, look for accounts that you do not have. With skyrocketing numbers of identity theft, it is critical to verify the accounts listed are definitely yours. If you do find errors, contact both the creditor who reported incorrect information and the credit bureau that has the error in their report. Send a certified letter with return receipt to each of them and include photocopies of any documents you have as proof.
Related posts:
- Your Entire Life is on Your Credit Report
- What is an Experian Credit Report?
- Who has the right to obtain my credit report?
- What is identity theft?
- How to Get Your Equifax Credit Report
FAQ: How do I check my Free Credit Report?
Your credit report is the basis for your financial standing. No matter how slick or smart you may be, no bank will touch anyone with a low credit score. It's their money, why would they want to take a bigger risk than they need to?
If you don't know where your credit report score is at, now's the time to take a peek. Don't get surprised with a low credit score when you go in to review your report with a potential lender or even an employer, find out for yourself within minutes.
