Checking Your Credit Report
Sharon Powell, Extension Educator — Family Resiliency
Plan to check your credit reports once a year. It's free and can save you major credit hassles. Thanks to the Fair Credit Reporting Act, you're entitled by law to one free credit report per year from each of the three major credit bureaus: Equifax, Experian, and TransUnion. It's a good idea to check your report from each of them annually. This way, you will catch any errors in your reports — errors that can hinder your ability to obtain such things as a loan, a job, or rental housing.
Try to check your report at the same time every year so you know that the new data you're seeing isn't more than a year old. To help you remember, choose a time of year when other regular events occur. For example, you could check your report around New Year's, an important birthday, or tax time.
What Is a Credit Report?
A credit report is a document of information on anyone who has borrowed money from an institution that reports to the credit bureaus. It is composed of five types of information:
- Identifying information (such as current address, social security number, date and place of birth).
- Public records (such as bankruptcies, judgments, and tax liens).
- Collection agency accounts.
- Credit accounts.
- Inquiries made to your account.
Your credit report is different from your credit score, which is a numerical expression of your credit-worthiness based on information in your credit report.
Credit Report Errors Are Common
A recent study by the Federal Trade Commission found that one in four consumers had an error on their credit report. Some of the errors were minor, but the study also showed that about 5 percent of consumers had errors that so severely affected their credit score that they may have received higher interest loans than they otherwise would have. Obviously, this cost them money they could have otherwise saved. Remember: It's up to you to check your credit report for errors. No one else will, and the error will remain on your report for a long time, which could negatively affect your credit score.
It's important to check the report from each credit bureau because each report is unique. All three reports will likely have similar information, but they will vary slightly because your lenders don't always report to all three credit bureaus. This accounts for differences in your reports. Also, a mistake may occur on only one of the reports. If you don't check all three, you may miss an error.
Credit Scores Aren't Free
The Fair Credit Reporting Act states that you're entitled to a free credit report from each bureau once every 12 months, but not a free credit score. You usually need to pay a private organization to see your credit score, although some credit card companies and banks are now giving customers access to their credit scores at no charge. If all of the information on your reports is correct and you're not planning to apply for any loans in the coming year, you may not need to know your credit score.
Where to Order Credit Reports
To order, visit annualcreditreport.com, call 1-877-322-8228. Or complete the Annual Credit Report Request Form and mail it to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.
Federal Trade Commission (n.d.). A Summary of Your Rights Under the Fair Credit Reporting Act
Consumer Financial Protection Bureau (2014). What is a credit report?
Credit and Debt — Resources to help you better understand credit and debt so that you can make the right decisions for your family.
Credit Report Review Checklist — Consumer Financial Protection Bureau — The checklist is helpful in making sure that you’ve thoroughly checked all pertinent information.
Annual Credit Report Request Form — Federal Trade Commission — This is the form to use when you want to request copies of your credit report from each of the three major credit bureaus. You may also request by phone or online.
AnnualCreditReport.com — The website created by the three major credit bureaus for people to request their free reports.