Why Checking Your Credit Report Annually is Crucial
Because the information in your credit report is used to evaluate your applications for credit, insurance, employment, and renting a home, you should be sure the information is accurate and up-to-date. In addition, monitoring your credit is one of the best ways to spot identity theft. Check your credit report at least once a year to correct errors and detect unauthorized activity.Remaining vigilant about your credit report helps you maintain a healthy credit score and avoid any surprises when you need credit the most.
Where to Get Your Free Annual Credit Report
The only official site to get your free annual credit report allowed by law is www.AnnualCreditReport.com. You can also call (877) 322-8228.
This central site allows you to request a free credit file disclosure, commonly called a credit report, once every 12 months from each of the nationwide consumer credit reporting companies: Equifax, Experian, and TransUnion. Free credit reports requested online at this site are viewable immediately upon authentication of identity. Free credit reports requested by phone or mail will be processed within 15 days of receiving your request.
Many companies claim to offer free credit reports – and some do. But others give you a report only if you buy other products or services. Still, others say they’re giving you a "free" report and then bill you for services you have to cancel. If you go to www.AnnualCreditReport.com and follow the prompts for your free credit report, you can be sure the reports you get really are free.
Understanding the Details of Your Credit Report
A credit report provides a comprehensive view of your credit history, including your credit accounts, payment history, and any public records related to your financial status. It's crucial to understand each section of your credit report to ensure all information is accurate.
Remember, the free annual credit report does not include your credit score. You will be given an opportunity to purchase a credit score from any of the nationwide credit reporting agencies after you receive your free annual credit report from any of them in response to a request made through the website above.
About Your Credit Score
A credit score is a complex mathematical model that evaluates many types of information in a credit file. A credit score is used by a lender to help determine whether a person qualifies for a particular credit card, loan, or service. Most credit scores estimate the risk a company incurs by lending a person money or providing them with a service — specifically, the likelihood that the person will make payments on time in the next two to three years. Generally, the higher the score, the less risk the person represents.
Beware of Credit Repair Scams
The Federal Trade Commission (FTC) cautions consumers to be wary of companies that make claims regarding credit repair. These companies, commonly called credit clinics, don't do anything for consumers that consumers cannot do for themselves at little or no cost.
Beware of any organization that guarantees to remove late payments, bankruptcies, or similar information from a credit report, charges a lot of money to repair credit, or asks you to repeatedly seek verification of the same credit account information. These are often signs of a scam.
Here are some warning signs that the FTC and others say consumers should look out for to determine if they might be dealing with a credit clinic:
- An organization that guarantees to remove late payments, bankruptcies, or similar information from a credit report
- An organization that charges a lot of money to repair credit
- A company that asks the consumer to write to the credit reporting company and repeatedly seek verification of the same credit account information in the file, month after month, even though the information has been determined to be correct
- An organization that is reluctant to give out their address or one that pushes you to make a decision immediately
What to Do If You Find Errors on Your Credit Report
If you find errors on your credit report, it is essential to take action immediately. Contact the credit reporting company and the organization that provided the incorrect information. Provide them with documentation to support your claim and request that the error be corrected.
Keep a record of your communications and follow up if necessary. Correcting errors on your credit report can improve your credit score and ensure that your financial history is accurately represented.
Sources: ftc.gov and www.AnnualCreditReport.com
