When did you last review your credit report?
Melissa Fernalld, CFP®
Your Credit Report is a detailed history of your credit information. Errors on your report are not uncommon. This Blog Post will walk you through how to receive, review and reconcile your Credit Report.
Your credit score is a value derived from a detailed history of your credit information (or your credit report). It will include information about your current (and past) debts including balances, delinquent payments, bankruptcies and inquiries. Lenders often use your credit score as a key factor in determining whether or not to qualify you for a loan or a credit card and what the terms, such as the credit limit and interest rate, should be. More than that, your credit score can affect insurance rates, employment opportunities and more.
Find and Correct Errors
If you read no further, know this: credit reporting is far from flawless, leaving the door open for errors or incorrect information to be reflected on your report. Errors on your report can potentially negatively impact your score, eligibility for certain lending products, and/or may result in you failing to qualify for favorable terms. Although errors can have a material impact, there are relatively straightforward processes for correcting them with each of the credit bureaus so the most important thing is to periodically make it a priority to carefully review your report and resolve any inaccuracies that may appear in as timely a manner as possible.
Protect Yourself
Another compelling reason to make a regular review of your credit report a habit is to protect yourself (and your loved ones!) from identity theft and fraud. Regularly reviewing your credit report provides you with an effective means of identifying potential fraud or identity theft.
Don't Forget the Kids!
Remember, that this is a best practice for all members of your household, including children or other dependents. Fraudsters know that children are less likely to actively monitor their credit reports since they are typically not utilizing credit. That makes them easy targets for identity theft which can be combatted by regularly pulling your child’s credit report to review right along with your own.
Obtain Your Free Credit Reports
Everyone is entitled to receive a copy of their credit report at NO cost every 12 months. (Due to the pandemic, all three major credit buraus are currently providing free credit reports every week.) The three major national credit bureaus (Equifax, Experian, and TransUnion) have a centralized website, toll-free telephone number, and mailing address so you can order your free annual reports in one place. Do NOT contact the three national credit bureaus individually. This is the only authorized way to order your free credit report:
- Online: AnnualCreditReport.com
- Phone: Call 1-877-322-8228
- Mail: Complete the Annual Credit Report Request Form and mail it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281
A few helpful tips to keep in mind when requesting your credit reports
- You can request your credit report from each of the major credit bureaus individually. Since they offer a free report every 12 months, consider staggering which bureau you request your report from so that you can obtain one every 4 months.
- You will have to enter personal information, including details such as your social security number, when requesting your credit report. Make sure to ONLY use the request methods described above to ensure your information is protected.
- As a default, credit reports do NOT include credit scores. Credit scores can be a nice way of loosely assessing your creditworthiness but in reality, the scores used by lenders may differ and your credit score is far less important that the information on your actual report. You can typically elect to receive your credit score along with your credit report for a fee. We typically wouldn’t recommend paying for a score since it’s not likely to be the same score as the one your lender uses and there are typically other (free) ways to assess where you stand. Many online banking platforms and credit card companies now offer complimentary access to one of your credit scores.
Review Carefully
Now that you have received your free credit report, it’s time to review it. The following lists items worth paying particular attention to. The places listed are where incorrect or incomplete information most typically shows up and where signs of fraud are most apparent.
Personal information
- Name, Address, Phone Number
- Birth Date
- Social Security Number
- Employment Information
Accounts
- Unrecognized credit accounts, including revolving (credit cards and HELOCs) and installment accounts (mortgages and loans)
- Inaccurate status of an account (i.e. a closed account marked as open)
- Incorrect payment history (i.e. a current account labeled past due)
- Inaccurate account holder status, such as being listed as an authorized user when you’re a primary account holder
- Incorrect credit limits and balances
Inquiries
Companies that pulled your credit report without your authorization or knowledge. This can be an indicator that a fraudster applied for an account in your name.
Public records
Bankruptcies, liens, foreclosures, civil suits and judgments that you weren’t involved in.
Reporting a Dispute
You should explain in writing what it is you have identified as incorrect. Include copies of documents that may support your dispute and clearly identify each mistake. Request the information be removed or corrected and include that portion of your credit report that contains the inaccurate information. It is always a good idea to send your letter via certified mail so that you have proof of receipt. Additionally, you can contact them online or by phone. Here is the list of contact details for the three national credit bureaus:
- Online: www.equifax.com/personal/credit-report-services/credit-dispute/
- By phone: Phone number provided on credit report or (866) 349-5191
- By mail: Download the dispute form and mail to: Equifax Information Services LLC, P.O. Box 740256, Atlanta, GA 30348
Online: www.experian.com/disputes/main.html
By phone: Phone number provided on credit report or (888) 397-3742
By mail: Use the address provided on your credit report or mail your letter to: Experian, P.O. Box 4500, Allen, TX 75013
Online: https://dispute.transunion.com
By phone: (800) 916-8800
By mail: Download the dispute form and mail to: TransUnion LLC, Consumer Dispute Center, P.O. Box 2000, Chester, PA 19016
Remember...
One of the most important reasons to review your credit regularly is to detect any fraudulent information. Everyone is fair game when it comes to fraud. Set a reminder on your calendar a few times a year at least to check-in.
Disclosure:
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. The opinions expressed and material provided are for general information and does not constitute the advice or recommendation of Strategic Financial Services.
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