Yes, you can and should be checking your credit report at least once a year to make sure that all in credit land is as it should be. How, you ask? What should I do with it once I get it, you ask?
The Credit Reporting Agencies
The three credit reporting agencies (Experian, Equifax, and TransUnion) will send you a free credit report once a year if you ask for it. See www.annualcreditreport.com for more information and to order your reports ASAP.
Each of the credit reporting agencies has slightly different methods for reaching your final credit score. They'll all be fairly close, but do keep in mind that its best practice to get all three scores for the best indicator of your actual credit worthiness.
4 Key Areas of Info on Your Free Credit Report
Credit reports are not as intimidating as they sound. They're pretty straightforward, and will contain the following sections:
- Personal Information
This section includes your name, address history, social security number, date of birth, and employment history.
- Credit History
The largest section of your credit report, "Credit History" will contain information on all the credit accounts that you've either opened or co-signed for, including accounts you've closed. The information listed for each account includes the date you opened the account, your credit limit, the payment terms and history, and the account balance. Each account's activity will appear on your credit report and continue to influence your credit score for 7 to 10 years.
- Credit Report Inquiries
Whenever someone inquires about your credit, such as a landlord, lender, or insurance company, this information is recorded and remains on your report for up to two years.
- Public Records
Any public information, such as bankruptcy, late child support, or unpaid taxes, can stay on your credit report for up to 7 years.
Comb through each of these sections and make sure that all the information is correct. If it's not, dispute the item as soon as possible to limit the impact on your credit score.
How to Make A Credit Report Dispute
Think of credit reporting agencies as the bosses of your credit. You want to make sure that your boss has all the facts so that he or she can judge your performance accurately, right? It's the same thing when it comes to your credit score. You want to keep lines of communication open with the agencies and resolve all potentially negative items as soon as possible.
When combing through your report, highlight anything that seems unusual. If one of the items you've highlighted is a bill that you just forgot to pay, pay it. Then, ask that business to write the credit reporting agencies and let them know that the matter has been resolved.
If you find any information on your account that is inaccurate or incomplete, request a dispute with the credit reporting agency. You can do this online or over the phone. The credit reporting agency will contact the source of the information, ask them to verify the item, and get back in touch with you and let you know the conclusion of their inquiry. In this manner, negative items can potentially be erased and all the information on your report can be made accurate and up to date.
Mistakes in credit reporting are more common than you might think, and some due diligence now could save you a lot of trouble down the line!