When was the last time you checked your credit report for accuracy? Or to obtain your credit score? What does your credit report mean to those who lend you money and credit? In your financial life, it can also affect your career, education and rates that lenders offer you. Your credit report should make you as financially attractive as possible.
The credit report is the single most important document for protecting you against identity theft. When you review your report, you can see your payment history and understand how your credit is rated and prevent errors from going undetected. Items they look at include: personal information, borrowing history, public record, and inquiries from other parties (such as applications).
Major Credit Reporting Agencies
The three major credit reporting agencies are Equifax, Experian and TransUnion.
Order your free report at annualcreditreport.com or call 877-322-8228. It's a good idea to review your credit report from the three credit bureaus, getting one every few months in order to find any inconsistencies when you compare the reports. Be on the lookout for unrecognizable names, a change of address, accounts you don't recall opening or past due notices on accounts you no longer use. Contact any of the following:
Equifax—P.O. Box 740241. Atlanta GA 30374; 800-685-1111
TransUnion—P.O. Box 6790, Fullerton, California, 92834; 888-909-8872
Experian—P.O. Box 9530, Allen, Texas, 75013; 888-397-3742 (888-EXPERIAN)
Know your FICO Score
If you've ever applied for a loan, there is always a FICO (Fair, Isaac & Co.) score involved. Your FICO score helps a lenders assess the likelihood that a loan will be repaid. A FICO Score is a three-digit number based on the information in your credit reports. It helps lenders determine how likely you are to repay a loan. This, in turn, affects how much you can borrow, how many months you have to repay, and how much it will cost (the interest rate). Although ranges vary depending on the credit scoring model, generally credit scores from 580 to 669 are considered fair; 670 to 739 are considered good; 740 to 799 are considered very good; and 800 and up are considered excellent.
Here are the main factors that make up your credit score that can have a significant impact on your overall FICO score.
- Payment history
- Amount of Credit Used
- Length of Credit History
- Types of Credit Used
- Recent Searches for Credit
Who else pulls credit reports on you and why
The federal Fair Credit Reporting Act (FCRA) and state credit reporting laws restrict who can access your credit report and how it can be used. You may be surprised to know that even if you're not borrowing money, certain companies or individuals may be looking at your credit report.
- Telecommunications companies
- Health/Life Insurance providers
- Car Insurance companies
- Government Agencies and courts
- Collection agencies
- Entities with a court order
- Assisted living facilities and nursing homes
Aside from those listed above, most other people and businesses cannot legally request a copy of your credit report. For example, your credit report may not be used in divorce, child custody, immigration and other legal proceedings. This goes for district attorneys who may be seeking information to investigate civil or criminal cases.
Set up credit monitoring
From financial institutions, to credit card providers, to money management websites, there are several different sources for credit monitoring. The idea isn't to obsess over your score, though. Once you've built an excellent score, use credit monitoring to alert you to unexpected information on your credit reports. This is credit monitoring's most significant value.
What to do if there is an error
Most of the time, erroneous data in your credit file comes from mistakes—whether it's incorrectly processed information or someone else's data misfiled with yours. These mistakes affect your score. So if you receive an update from a credit monitoring service that seems inaccurate, review your reports immediately. If your credit monitoring service provides free access to your reports, take advantage of it. You can also access your credit reports for free once a year by visiting annualcreditreport.com or calling 877-322-8228.
Sometimes, fraudulent data appears because a scammer accesses your existing accounts or steals your identity to open new accounts. If that's the case, it's wise to file disputes for all false information in your credit files. And it's an excellent idea to use the step-by-step guide outlined in detail at.
Once you pinpoint the incorrect information in the credit file, the next step is to dispute the falsehoods. Disputes essentially require the reporting company to prove that the data they reported is legitimate. If they can't prove that it accurately belongs to you, they must remove it from your reports. Report disputes for the three major credit bureaus at:
Equifax: equifax.com/personal/credit-report-services/credit-dispute or 800-685-1111
Experian: experian.com/disputes or 888-397-3742 (888-EXPERIAN)
TransUnion: dispute.transunion.com or 888-909-8872
Step 1: Call the companies' fraud departments where bogus charges occurred and:
- Freeze legitimate accounts. Demand documentation for any questionable charges or activity.
- Cancel any new account opening you did not open. Request documentation for this fraudulent account.
Step 2: Place a free, one-year fraud alert with one of the three credit bureaus listed above. The company you notify must notify the other two.
- Consider freezing your credit bureau files, creating a barrier to using a misuse of your information in an attempt to open new accounts.
Step 4: You may choose to file a police report with your local office. Inform them that someone stole your identity, file a report, and get a copy of the report.
What to do next: Repair the damage. Track and record all communications and efforts.
- Review all of your other accounts, and remove bogus charges from your accounts.
- Request your free annual credit report from the bureaus themselves or from annualcreditreport.com. Note: Identity theft victims are entitled to additional free credit reports.
- Review your credit reports often and correct as necessary.
- Consider adding an extended fraud alert or credit freeze.
- Change all account passwords.
- Run a virus scan on your computers.
- If you have identity theft insurance, file a claim.