Understanding Your Credit Report

Your credit report and credit score are two key indicators of your credit health. They are also valuable tools used by lenders, service providers and landlords. The combination of a healthy credit report and a high credit score make getting a loan or credit card easier and can lead to lower interest rates, saving you a lot of money.

Credit reports

Are you looking for a great tool to see how lenders look at you? Do you need a way to indicate that you might be the victim of bad information or identity theft? Your credit report can do both – and it’s free.

Why does my credit report matter?

  • Your credit report is used to calculate your credit score. Businesses and individuals can request copies of your credit report and credit score to assess how well you manage financial obligations and pay your bills.

How can I get my credit report and where does the information come from?

  • You can request your report for free online at www.annualcreditreport.com and see it instantly. This is the only authorized online source for a free report. While many other sites offer to do the same thing, they are likely to charge you a fee or try to sell you additional services. Call 877-322-8228 to request your report by phone.
  • When requesting your free report, you will be asked for your name, address, date of birth and Social Security number. As an additional security measure, you will be asked other financial questions that only you would know the answer to.
  • The information in your credit report is provided to the reporting bureaus by credit card companies and lending institutions, and comes from public records that contain information including bankruptcies and collections.
  • Your credit report can vary a bit from each of the three credit bureaus. Request all three at once to see how they differ, or spread your requests out over a year. Spreading your requests allows you to better monitor your report over time.

What’s in my credit report?

  • Personal details such as your name, address, birth date, Social Security number, telephone number and employment information.
  • Information about your accounts including credit cards, home, car and student loans. Loan and credit payment history, account balances, loan amounts and credit limits, as well as when accounts were opened or closed.
  • Inquiries about your credit history (including dates) from lenders and others, such as landlords and utility companies.
  • Public records (including foreclosures, bankruptcies, liens and wage garnishments).
  • Negative information - such as late payments or bankruptcies - stays on your credit report for a period of time. Some information stays on as long as seven years. Filing a personal bankruptcy remains for 10 years.

Besides me, who can see my credit report?

Access to your credit report and your credit score can be provided by the credit bureaus to lenders; service providers (like utility and phone companies); landlords, banks or other legitimate businesses you are dealing with; insurance companies; and employers, if you allow them to access your report.

Is my credit report the only thing lenders care about? No, lenders are likely to look at your income and work history too.

What if I notice possible problems?

  • Study your credit report. Be aware of what is there and whether or not you think it is correct.
  • Is the information about you and your accounts correct? Do you see late payments or other negative information you feel is wrong? Are there accounts listed that you know aren’t yours? Do you see a lot of unexpected report inquiries from lenders, people you don’t recognize, or even utility companies from other towns?
  • If you find errors, contact the credit bureau that provided your report, as well as the business or company you think provided the wrong information. The two groups are responsible for fixing inaccurate or incomplete information.

Provide the following information to the credit agency:

  • Your name, address and date of birth. They might also want your Social Security number.
  • Report the details in dispute, and provide (if possible) any documentation you have that can help clear things up. Send copies of the documents, not the originals.
  • Highlight the portion of your credit report that shows the disputed information.

Here is how to contact the credit bureaus:

  • Experian: www.experian.com or 1-888-397-3742
  • Equifax: www.equifax.com or 1-800-685-1111
  • TransUnion: www.transunion.com or 1-800-916-8800

What happens next?

  • Credit bureaus are required to investigate your legitimate claims, generally within 30 days, and must check your claims with the organization you feel supplied the wrong information. If an error is found, the business must report that error to the three credit bureaus so it can be corrected. The credit bureau must then give you the results of the investigation in writing and a free copy of your credit report if a change has been made.
  • You can ask the reporting bureau to send correction notices to any business or person who received your credit report in the past six months.
  • If your dispute is not settled, you can ask the credit bureau to include a statement of the dispute in your credit report.

In cases of identity theft or fraud:

  • Make sure you notify the credit bureaus, related credit or loan companies, and file a report with law enforcement. Ask them for advice about what you should be doing and what to be aware of.
  • Many financial institutions and the credit bureaus offer products to help you. These paid (and sometimes costly) services watch for things like new accounts, unexpected changes in credit balances, and other charges. This type of monitoring by itself won’t stop identity theft but it can help you spot problems and act on them quickly.
  • Contact your local banker, a financial adviser or the Better Business Bureau for advice.