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.
What many people don’t know is that 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, I recommend checking your credit report often – to verify the accuracy of your credit report and help monitor for identity theft and other credit fraud.
Check Your Credit Report Fairly Often
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 get the problem taken care of.
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 I will show you how to get that later in this article. Before we go further, let’s look at why you should monitor your credit report and examine some common errors found on credit reports.
The 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 – either from a lower credit score than you should truly have, or by not noticing when someone steals your identity and racks 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.
Reasons you should check your credit report often:
- Accurate listings
- Fraud detection / prevention
- To work on improving your credit score.
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 still accurate.
It is not unheard of for information to be transcribed incorrectly and to see someone else’s information on your credit report. For example, if they have the same name or a similar Social Security Number. 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. Name, Social Security Number, address, etc.
- Inaccurate/outdated account info. Recent account closures, credit limit changes, etc.
- Inaccurate listings for delinquencies or missed payments. Provide proof of your payments with bank statements or canceled checks.
- Missing Accounts. Verify 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 with a similar name or Social Security Number as you.
- Negative line items more than 7 years old. Your credit score should usually only list items that are within the last 7 years.
How To Disput Errors on Your Credit Report
It’s important to know how to verify your credit report is correct and learn how to dispute errors on your credit report should there be any inaccuracies.
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 be sure that all of the information contained within 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, or locate the form online and print it out. Once you have form filled out, mail 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 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.
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. Statements from companies showing the bill was paid, canceled checks, etc.
Send all of this to the consumer reporting agency. Be sure to keep a copy for yourself. Send your letter by certified mail with return receipt requested.
The credit reporting agency will be required to investigate all of 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 new copy of the updated report.
Disputing errors on your credit report is important if you’re trying to rebuild your credit or to obtain a mortgage or other loan. Following these steps are important, too, and can help you maintain your good credit.
How to check your credit report for free
You can get a free copy of your credit report from each of the three major credit bureaus one time per year.
To get your free credit report, simply go to AnnualCreditReport.com and sign up for your free credit report offer. Be sure to watch out for the “upgrades” that offer to sell you your credit score. We’ll show you how to get that in just a moment.
To maximize your value, get your credit reports 3 times each year (one every 4 months from a different credit bureau each time).
For example, get your free credit report from Equifax, wait, get it from Experian, then TransUnion. You can also add your spouse or significant other to the mix, which will help you monitor his/her credit report as well as monitor any joint credit accounts you may have. In that scenario you can get a free credit report as often as every 2 months.
How to get your free FICO Credit score
While your credit report is free from AnnualCreditReport.com, your credit score is not.
You have the option of buying it at a discounted price when you get your free credit report, or you can easily get your free FICO credit score by signing up for a free trial with a credit monitoring service, then canceling it before the free trial period ends.
The free trials usually last 7 – 30 days, which is plenty of time to save a copy of your credit report and credit score. It is the easiest way to get a free copy of both your credit report and credit score.