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 IdentityGuard.com |
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 Experian.com |
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Credit reports are designed to give you a clear picture of your financial health and creditworthiness. Sadly, not all credit reports are created equal. You don’t want to waste time or give yourself unnecessary financial stress by getting an incomplete or inaccurate report. Thus, it is important to get the best and most accurate credit reports each time you look at your credit history. Here are the top three tips for receiving the best credit reports:
1.Look where they’re checking
Your credit report needs to be a complete picture of your financial situation to be an effective financial planning tool. Many reports offer themselves up as complete but really only pull information from one credit bureau. This does you a disservice by forcing you to get multiple reports so that you can compare the data between them.
Your best bet for getting the best credit reports is to read the fine print carefully to track where information is being collected. In this way, you will know before you order the report which ratings agencies will be included. This can help you determine if the final information is correct or if you need to work on errors.
The sources for the information on your credit report can also dictate the terms. If your local bank is behind on reporting loan payoffs, you will see a very different report that if all the institutions were up to date. Understanding the why and how of the information pulls on the report can help you avoid problems and confusion.
2.Evaluate costs
Credit reports are available for a number of fees, or you can get your credit report for free. There are advantages and disadvantages to both the fee and free reports. When you think about why you want the credit report, this can help you determine whether you will be more benefit out of paying for the report or if you can afford to get your reports for free.
Free credit reports are available from annualcreditreport.com, which is sponsored by the US government and the Federal Trade Commission. However, these reports do not include a credit score, and they only pull information from one credit bureau at a time. To get a view of your credit report information from all three bureaus free of charge, you have to visit the website again and request the report from another agency.
For a fee, you can have your credit report anytime or all the time. With credit monitoring services, you have the option to get ongoing access to your credit profile. These services are available through each of the major credit bureaus and also through consumer advocacy groups or your home financial institution. Some of these credit report providers also provide score tracking as a part of their services.
3.Keep on top of errors
Finally, to ensure that you are receiving the best credit reports, you need to keep on top of errors in your accounts. Anytime you receive a credit report and feel it has erroneous information, you need to move to have it corrected immediately. Incorrect information can distort your credit score or be an indication that your account has been compromised.
The numbers around errors on credit reports vary, depending who is doing the reporting and what their motivations are for the statistics. According to some, there are 52 million Americans who have errors in their credit reports, an astonishing one in seven. However, other sources say that only 2% of credit reports have mistakes.
Many items that you may view as erroneous are actually signs of identity theft. If you are seeing additional accounts in your name, large balances owed on cards you don’t use regularly, or a sudden spike in credit inquiries when you are not in the market for a loan, someone else may be using the account. You will want to investigate and report this as soon as possible, as most identity theft victims who catch the crime within the first five months incur no out of pocket fees. If you have been pulling your credit report regularly, you will be better able to spot errors and document that charges were not made by you
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Credit is critically important in lending decisions, credit card accounts, and your overall financial health. Understanding your credit score and your credit report is therefore important. Unfortunately, many consumers are still confused about the basic elements of their credit, their ability to see their credit reports, and what to do when there are errors. Don’t count yourself among the befuddled any longer! Read through the top three questions and answers about credit reports below.
What’s in my credit report?
Your credit report is a compilation of your financial activities. It works by pulling in data from each financial institution or credit card company with which you have a lending relationship. It may also include information furnished by the IRS or other government agencies about debts owed, as in garnishments or penalties for back taxes.
Most credit reports cover the following areas:
- Payment history. For each line of credit or revolving account listed on your credit report, you should also see a statement of whether or not the account is current, what amounts are overdue, how long they have been overdue, and whether payments have been on time or late during the time in which the account has been open.
- Total amount owed. For account listed, you should see the total amount owed. This will give you payoff amounts for loans, credit card balances, and any past due bills that needs reconciled.
- Length of credit history. For each item on your credit report, you should see how long that account has been open. This will help you pick out new credit accounts and see if your personal credit history is accurate.
- Recent inquiries. Recent inquiries tells you how often you have had a business look at your credit for the purpose of a loan or new credit account. If there are inquiries that you didn’t authorize, it could be a sign of fraud.
Where can I get a copy of my credit report?
You can get a copy of your credit report from a number of sources. Some of these sources are free, while others charge fees. The government sponsored method for obtaining a credit report is to go through www.annualcreditreport.com, where you can request a free copy of your report once each year from each of the three major credit bureaus. You can also contact each of the three major credit bureaus directly to get a copy of your report, though you will be responsible for paying the charges for the report.
If you have a credit monitoring service, you may also receive regular access to your credit report through that service. Read through the fine print of you policy to see what you are entitled to get from them. Some credit monitoring services offer customers unlimited access to their credit reports, while others provide weekly or monthly access.
How do I fix a mistake on my credit report?
One of the purposes of looking at a credit report is to check for errors in the report. However, once these errors are identified, you still need to go through the process of removing the errors or having them corrected. The process for fixes mistakes on your credit report is governed by the Fair Credit Reporting Act and is as follows:
- Inform the credit bureau in writing that an item is incorrect. Your letter should list the item in question, what you would like done about the problem, and describe the documents that back your claim. Include copies of the documents with your letter, and send the letter by certified mail.
- Your credit bureau has 30 – 60 days to investigate the error. They do this by going back to the source of the data and having their data provider review the relevant information.
- When the provider reports back to the credit bureau, they must take action to justify, remove, or correct the item in question. In a perfect world, the provider of the data also fixes their reporting with all the other credit agencies, but you may have to check each one individually to ensure this happens.
- At the end of the investigation, you will receive notification of the outcome in writing. You will also get a free copy of your credit report reflecting any changes that result from your error correction.
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