If there’s one thing personal finance experts keep telling us this year, it’s this: Now is the time to get familiar with your credit report.
Why? For one thing, it’s harder to get a good deal on a loan, mortgage, or credit card these days without having great credit. Banks have reacted to the recession by becoming more strict about who they lend money to—and they’re using your credit report to make those decisions.
Meanwhile, if you’ve entered into any forbearance or deferral program because of pandemic-related hardship, you can make sure those arrangements are recorded properly.
“As we work mightily to keep our finances in shape, we need to vigilantly protect our credit, too,” says Farnoosh Torabi, a financial journalist and NextAdvisor contributing editor.
Checking your credit usually refers to pulling your credit reports from the three credit bureaus: Experian, Equifax, and TransUnion. Your credit score is calculated using the information found in your credit report (you can find your score online through your bank or credit card issuer) so reviewing its contents regularly for accuracy and insight is fundamental.
Plus, it’s free.
You can now request free credit reports weekly through April 2021, a measure designed to help consumers face the economic challenges brought on by the ongoing financial crisis.
Requesting your free annual credit report has always been a good idea. Mistakes are more common than you might think; one in five Americans find an error on their report.
What Does a Credit Report Include?
- Personal details such as your name, address(es), and social security number.
- Credit accounts currently open in your name, including the date opened, current balance, and your payment history.
- Credit inquiries or “hard pulls” made by creditors in the past two years.
- Public records of any bankruptcies, liens, or foreclosures from the past seven to 10 years.
In the United States, credit reports are generated by three main credit bureaus: Experian, Equifax, and TransUnion. Lenders report activity to these agencies, which compile and organize the information into a comprehensive report. The law authorizes certain third parties to view your credit report if they have a vested interest in your credit history. The list includes financial institutions, insurance providers, government agencies, landlords, and employers.
One important thing to note is not every lender reports to every credit bureau. This is why you should check all three; an error can exist on one report but not the others.
How to Order Your Free Credit Report
You can request your free credit reports from all three bureaus at once by visiting AnnualCreditReport.com. This is the only website authorized by the FTC to provide free annual credit reports. The process takes just a few minutes to complete online. Here’s how to do it:
- Visit www.annualcreditreport.com from your smartphone or computer’s web browser and click the button to request your free credit reports.
- Fill out the annual credit report request form by providing your name, date of birth, social security number, and address.
- Choose which credit bureaus you’d like to request reports from.
- Follow the instructions from each bureau to verify your identity. You may be asked questions about your personal details or credit history for security purposes.
- View your credit reports online. Make sure to print or save each report; once you close your browser window, you may not be able to return.
Not everyone is comfortable navigating the credit report request process online. Alternative options are available to those who would rather check their credit by phone or mail.
To request a free credit report by phone:
- Call the Annual Credit Report Request Service at (877) 322-8228.
- Press 1 to submit your request by phone.
- Follow the automated instructions to provide your personal information. You may need to speak with a live representative to verify your identity.
- Your credit report(s) will be mailed to you within 15 days.
To request a free credit report by mail:
- Print and fill out the annual credit report request form.
- Seal your completed form in an envelope and mail it to:
Annual Credit Report Request Service
P.O. Box 10521
Atlanta, GA 30348-5281
- Your credit report(s) will be mailed to you within 15 days.
Under normal circumstances, you can request one free credit report per year from each of the three credit bureaus using any of the above methods. However, the bureaus recently made a joint decision to offer free reports weekly to all Americans until April 2021. This is a big change, but is it really something you should start doing every week? According to the experts we talked to, not really.
“If you check your credit report from week to week, it’s not likely much will change – though a check-in once a month to once every few months can be helpful,” says Lauren Bringle, accredited financial counselor and content marketing manager with Self Financial, a subscription service helping consumers build positive payment history while contributing to a savings fund. Since most financial institutions only report to the credit bureaus at the end of each monthly billing cycle, you probably don’t need to check more frequently.
Beware of Imposter Sites
The only website you should be using to request a free credit report is annualcreditreport.com.
Unfortunately, some consumers mistakenly visit other websites that show up in online search results. Many of these sites will advertise a free credit report, but later try to upsell you on their paid service or even mislead you into signing up for a subscription.
One example was freecreditreport.com, a website owned by Experian that was forced to settle with the FTC in 2005 for failing to adequately disclose that consumers would be signed up for a $79.95 annual membership. The website still exists and can grant you access to your Experian report for free, but not Equifax or TransUnion. A statement from Experian says freecreditreport.com was created nearly five years before free annual credit reports became required by law and “is not represented in any way as a replacement, substitute or alternative to the federally mandated free credit report website.”
The only trustworthy place to request your free credit report is AnnualCreditReport.com. You should never be asked for credit card or payment information to view your credit history.
There are also nefarious scammers using lookalike websites to find targets for identity theft. “Be especially careful of making any typos when entering annualcreditreport.com into your web browser,” cautions Ben Dobler, certified financial planner, enrolled agent, and founder of Stewardship Financial Counsel, a virtual financial coaching business based in Cincinnati. “A minor spelling error could easily misdirect you to a website designed to steal your personal information and sell it or use it against you.”
Why It’s Important to Check Your Credit Report
Checking your credit report should be done periodically to screen for reporting errors and unrecognized activity. The first signs of identity theft usually appear on your credit report, and the earlier you spot them, the easier it is to stop the theft. Even if all the information you find is accurate, seeing your credit activity at a glance can give insight into how to manage debt more efficiently and raise your credit score.
Requesting a free credit report should also be an early step in any upcoming plans involving applying for a loan, such as buying a home or car. “Pull a copy at least six months before a major purchase because if you do need to work on your credit, dispute errors, etc., it can take several months or longer to address these issues,” says Bringle.
As long as you’re entitled to a free report, there’s no harm in requesting one. “A common myth is that getting your own report will hurt your credit scores,” says Rod Griffin, senior director of public education and advocacy at Experian. “It won’t.” This is because there are two types of credit checks: hard inquiries and soft inquiries. While the former can temporarily ding your score, the latter – which includes requesting your personal credit report – will not. “Soft inquiries do not affect credit scores or lending decisions,” says Griffin.
What to Do If You Find Errors
If you spot something on your credit report that doesn’t seem correct, federal law grants you the right to have the error fixed in a timely manner. This involves a process known as a dispute in which you file a written request to the credit bureau(s) reporting the error. Once you report a mistake, the credit bureau has a legal obligation to investigate within 30 days.
Before you submit a dispute, double-check. Sometimes an account listed on your report won’t look familiar, because it operates under a different name For example, retail credit cards might be listed under an associated bank. .“Retail store accounts sometimes are listed by the name of the bank that actually owns the account rather than the name of the store,” says Griffin. “That’s a common source of confusion.” You may need to call the phone number listed on the back of your card to ask which bank issues the account.
If you can’t verify the accuracy of any information on your report, it’s better to be safe than sorry. Filing a dispute doesn’t cost anything and shouldn’t take more than a few minutes to complete. Each credit bureau has its own process for disputes, and you’ll need to contact each individually.
- Experian: Use the online dispute center or mail in your documentation. Alternatively, you can call the phone number listed on your credit report.
- Equifax: Submit a dispute online, by mail, or over the phone by calling (866) 349-5191.
- TransUnion: Start an online dispute by choosing the type of error you’d like to report. Disputes are also accepted via mail and by phone at (800) 916-8000
Once you file a dispute, the credit bureau should respond in writing with the results of their investigation within a month. Many disputes are addressed in a matter of days. In many cases, this will resolve the issue. However, if the outcome isn’t in your favor, you still have options.
“If your request to have the error corrected is denied, you have the right to request a copy of your dispute be kept with your credit file to document the error,” says Dobler. While this won’t remove the disputed information from your credit report, it will explain your side of the story to anyone who pulls your report in the future.
Remember through every step of the process, the Consumer Financial Protection Bureau exists primarily to protect your interests. You can always file a complaint if you believe a credit bureau or financial institution is not properly addressing a valid credit reporting error.