One important step in building and maintaining a good credit history is to regularly monitor your credit history reports for mistakes. Inaccuricies on your credit reports can cause lenders to charge you higher interest rates or even deny you for loans. You want to make sure your credit history reports are accurate because they may be evaluated by insurance agencies when you apply for an insurance policy, by landlords when you apply for leasing an apartment or house, and may be considered by employers when you apply for a job. Checking credit reports can also help you recognize identity theives who may have illegally opened credit accounts in your name. The best thing about checking you credit history is that it’s free.
The Fair Credit Reporting Act allows you to obtain one free credit report per twelve months from each of the three consumer credit reporting companies. Those companies are Equifax, Experian, and TransUnion. You should not contact the credit reporting companies directly for your free credit reports. The place to obtain your free credit reports is AnnualCreditReport.com. You can obtain your credit reports through other websites, but they often try to sell you additional products with your credit report. AnnualCreditReport.com is the only website authorized by federal law to provide the free annual reports. You can also request your free annual credit reports by phone (1-877-322-8228) or by mail if you prefer not to access the reports online.
You should request your free credit reports from all three of the credit reporting agencies because your credit history information can differ between them. For example, a lender may report to Equifax about your loan but not to Experian, so if you just checked your Experian credit report, you would not see the loan in your credit history. You can obtain your credit reports from all three companies at the same time or just one at a time, as long as you request no more than one report from each company per twelve months. A good strategy is to request just one credit report every four months, alternating the company you request from each time. For example, you could request your Equifax report every January 1st, your Experian report every May 1st, and your TransUnion report every September 1st. This four-month rotation would allow you to keep a more continuous watch on your credit history over the year.
If you find incomplete or incorrect information in your credit history report, you should dispute the inaccuracy by contacting the credit reporting agency and the entity that provided the incorrect information. Supplying any evidence you have to dispute the inaccuracy will help get it corrected. The information provider must research the matter, and if it determines the information is inaccurate, it must notify all three of the credit reporting agencies so they can correct your credit history reports. If the credit reporting agency or information provider determines the information is accurate as is, they may not change your credit report. In that case, you should request a copy of your written dispute be included with your future credit reports so any entities that receive your credit reports are aware of your dispute regarding the inaccurate information.
Please note that your credit report is different than your credit score. Credit scores are calculated based on information in your credit reports and used by lenders to grade your credit worthiness. Credit scores are most relevant to individuals who are trying to obtain large loans, such a home mortgage, because lenders use credit scores to determine what interest rate to charge the borrower. The Fair Credit Reporting Act does not require any companies to provide your credit score for free, so be prepared to pay for your credit score if you want it. Purchasing your credit score is not really necessary if your only objective is monitoring your credit history to detect errors and identity theives. Obtaining your three free credit reports on an annual basis should be a sufficient way to monitor your credit history and ensure its accuracy.
Sources: Federal Trade Commission
