“If it ain’t broke, don’t fix it” is a saying that applies to many situations. But when it comes to your credit report, how do you really know if something is “broken” or not? Not keeping an eye on your credit report can potentially leave YOU broke, or at least on your way to some major headaches, if you’re not careful. The good news is, you can keep tabs on your credit report yourself.
The better news is, it’s quick, really easy, and FREE.
What’s in my credit report?
When it comes to securing a loan, most of us know that information from our credit report is a big factor in determining what sort of rate we will pay, or if we are able to get a loan at all. Let me first say that I do encourage you to do whatever you can to avoid borrowing money and going into debt if at all possible, but more and more now, the information gathered from your credit report is used not only when you borrow money. It’s taken into account to make decisions for your insurance rate premiums, rental applications, and even potential employment. The stuff on that report says a lot about who we are, whether we like it or not. In spite of this, most people never check their report, and some only after it’s too late, and they’ve been a victim of identity theft or worse. There are many reasons you should know what the credit report gods are saying about you. Here are my top three:
Why Should I Check it?
- Verify that your personal information is correct and updated. Common mistakes include a wrong or misspelled name, incorrect social security number, or incomplete address.
- Address potential errors which could hurt your ability to get credit. Sadly, it is not unusual to find an account wrongly listed as late, incorrect balance limits, or accounts open listed as closed or vice versa. The longer an error goes unnoticed the more difficult is it to clear up, so frequent monitoring makes good sense.
- Monitor your report to detect fraud and guard against identity theft. Of course, if you notice suspicious activity (and your credit card company’s fraud department hasn’t caught it yet), you need to act fast. All three credit bureaus will place a freeze on your report upon your request, and they have fraud alert services available to prevent further breaches of your identity. A freeze can be lifted for a specific company for a specified amount of time, if you want to temporarily unfreeze your credit.
How do I get it?
By law, consumers (that’s us!) are allowed to receive one free credit report per year from each of the three main credit bureaus – Equifax, TransUnion, and Experian. If you do the math, that’s twelve months, three bureaus, so that gives you access to check your FREE report every four months if you space each one out over a year, which is exactly I encourage you to do. The first time I pulled mine, I was surprised at just how much information was in there. You’ll be able to see your payment histories, open and closed accounts, who has attempted to pull your credit file, and lots more!
You have probably heard commercials or visited websites that promise free credit reports may require you to sign up for “free trials”. Some of them eventually charge you or sign you up automatically to purchase other products or services you may not need. The only authorized source under federal law that provides free credit reports from the three major national credit reporting companies is www.AnnualReport.com. When you go to their site, they will ask you some personally identifiable information to make sure you’re you, and then you’ll select one of the three agencies.
Mistakes on your report can cause you to pay more than you need to, limit your ability to purchase a home, or even block a security clearance. On the other hand, keeping a periodic eye on your credit activity and history is a common sense way to monitor your financial health.