Your credit report is one of the fundamental financial documents that represent your overall financial health.
Your credit report is used whenever you apply for a loan, credit card, mortgage and sometimes even a job or security clearance.
Having a clean credit report and a high credit score can save you thousands of dollars in interest over the life of a loan and make it easier for you to be approved for a loan request.
Your credit report can be used to help you monitor your financial situation and detect identity theft.
Because your credit is linked to so many aspects of your financial life, you should check your credit report often to verify its accuracy and help monitor for identity theft and other credit fraud.
Check Your Credit Report Regularly
Problems with your credit or fraud can cause huge problems if left unattended.
The more quickly you detect an inaccuracy or fraud, the easier it is to take care of the problem.
Because your credit report and credit score are so important, it is imperative that you ensure they are accurate.
Thankfully, you can get a free copy of your credit report from each of the three major credit bureaus once per year from AnnualCreditReport.com.
You should note that the free credit report does not come with a free copy of your credit score, but you can access that another way.
You should monitor your credit report and examine it for common errors found on credit reports.
Why You Need to Monitor Your Credit Report
Your credit report is a historical list of each credit account you have ever opened or been listed on.
Inaccurate information can cost you thousands of dollars. You could get less-favorable credit terms because you have a lower credit score than you should truly have, or you might not noticing that someone stole your identity and racked up thousands of dollars in debt in your name. Checking your credit report often will notify you quickly if there are any inaccuracies or other problems that need to be taken care of.
Why You Should Check for Credit Report Errors
Errors on your credit report can prevent you from getting a personal or auto loan, a mortgage, a credit card, or even a job. If you’re seeking a loan for any reason, you’ll want to have a recent copy of your credit report in hand early enough to dispute any information that is incorrect.
If your identity has been stolen, you’ll want to be able to clear your name, so it’s a good idea to check your credit report at least once a year in order to ensure that all the information contained within it is accurate.
Obtaining a free copy of your credit report is simple, and only takes a few minutes.
You can also get a copy of your credit report from companies that offer credit scores as well. Just be sure to read the fine print because credit scores are not always free and often require a credit card.
If you prefer not to complete the form online, you can call 877-322-8228 to request a hard copy of the form, or locate it online and print it out. Once you have the form filled out, mail it to:
Annual Credit Report Request Service
PO Box 105281
Atlanta, GA 30348-5281
The law allows you one free credit report each year from each of the three nationwide consumer credit reporting agencies.
You’ll be required to provide the following information in order to receive your report:
- Your full name (and any names you’ve used in the previous year, including your maiden name if recently married)
- Your current address (and recent addresses if you’ve moved during the previous two calendar years)
- Your Social Security number
- Your date of birth
You may also be required to answer some questions about your family in order to verify your identity.
Monitor for Inaccuracies on Your Credit Report
Mistakes happen. Some of them are honest errors, but some of them may be a more serious indication of fraud. Go through each line item thoroughly to verify it is a credit account you opened and that the information is accurate.
It is not unheard of for information to be transcribed incorrectly or to find someone else’s information on your credit report. Look for some of these common errors, and contact the credit bureau if you notice any errors or fraud.
Common Credit Report Errors:
- Inaccurate personal info: Verify your name, Social Security number, address and other personal details.
- Inaccurate/outdated account info: Ensure your recent account closures and credit limit changes are listed.
- Inaccurate listings for delinquencies or missed payments: Provide proof of your payments with bank statements or canceled checks.
- Missing accounts: Verify that each account you have open is listed.
- Duplicate accounts: Double-check that no accounts are listed more than once.
- Phantom accounts: Phantom accounts belong to someone else or don’t exist at all. These may be more common if someone has a similar name or Social Security number as you.
- Negative line items more than seven years old: Your credit score should usually only list items from within the last seven years.
How to Report an Inaccuracy, Dispute the Error and Get It Corrected
Should you find inaccurate information on your credit report, you’ll want to report it immediately. Make a copy of the credit report and type a letter describing the inaccuracy in full detail. Enclose any copies of documents supporting your position, which could include statements from companies showing the bill was paid or canceled checks.
Send all of this to the consumer reporting agency. Be sure to keep a copy for yourself. Send your letter by certified mail and request a return receipt.
The credit reporting agency will be required to investigate all the items in dispute within 30 days unless they consider your dispute frivolous. You’ll receive the results in writing when the investigation is complete. If a correction has been made to your credit report, you’ll also receive a copy of the updated report.
Disputing errors on your credit report is important if you’re trying to rebuild your credit or obtain a mortgage or other loan. Following these steps are important and can help you maintain good credit.