Options to consider when ordering a credit report
I mentioned in my last article that you can get a free credit report from the three credit agencies, Experian, Equifax, and TransUnion. There are many websites offering this, but they are frequently not free in the end. annualcreditreport.com is a centralized service for consumers to request free annual credit reports. It was created by the three nationwide consumer credit reporting companies themselves. More information about the service and about credit reports can be found on the website, and on the website of the three credit agencies which I list below.
You are allowed to order one free credit report every 12 months from each of the three credit agencies. Depending on the information that you're looking for, these two strategies are the best to consider:
You can order all three credit reports at once for the year so that you see the complete picture of your credit from all three agencies in order to fix them. This is best to do at least a few months or so before you plan on making a big purchase such as a home or a car where your credit will be run. This way you'll have time to make any corrections.
Your other option is to space out your credit report requests, ordering one from each agency in turn every 4 months for example. This helps you to monitor the state of your credit. This method is best if you've already gone through your credit report and fixed errors, and want to make sure nothing unexpected appears.
These free reports do not include your numerical FICO score. The credit agencies will give you an option to purchase that information, or you can use one of the suggestions I gave you in Step One, my last article.
What to do when you get your credit report
When you get a copy of your credit report, look it over carefully.
You will notice some differences between what is reported to each of the three agencies. There may be more than one entry for one item- a car loan, for instance- where two of the agencies have similar information, while the third received slightly different information in a separate entry. As long as the information is accurate, there shouldn't be an issue.
Most reports are organized in sections, and all of the ones that I've seen had the following structure:
Your Personal Information: Your current address, Previous addresses, Social Security Number, Date of Birth, telephone number, and your other names (if you got married and changed your name for example).
Your Account Information: All of your past and present credit accounts, bank accounts, loans, even some services like a gym membership. Each item will display up to 48 months of your payments and their status- if they were on time, or how late they were (30, 60, 90, or 120 days).
Credit Inquiries: Some reports list the inquiries on your credit which includes who made the inquiry, what effect it has on your credit, how long the inquiries will stay on your credit report, etc.
A "soft inquiry" doesn't affect your FICO credit score- these are inquiries such as your request for your own credit report, or someone who you do business with checking to judge if they want to offer you a service, for example. Some home rental communities will also get a copy of your credit report in order to see how well you handle paying bills.
A "Hard inquiry" does affect your FICO credit score, usually around negative five points for each inquiry outside of a grouping. These inquiries are ones that you prompt for the purpose of acquiring things such as a loan, a mortgage, a credit card, etc.
If you go shopping for a mortgage, all of the inquiries for that purpose within 30 days will only be affected by one negative 5 points. After that period, each one will be affected. Again, it's a good idea to plan your shopping around your credit score and to make sure to do all similar applications within a month. This will minimize the negative impact to your credit score.
After you have looked through your credit report, you have the option to dispute any information that isn't correct or to put security alerts on your SSN.
In order to dispute any information in your credit report, you can contact the three credit agencies at the websites below. Disputing information is free, easy to do through their websites or by phone, and should be taken care of within a couple of months if the issue is particularly complicated:
Equifax - www.investigate.equifax.com
Experian - www.experian.com
TransUnion - www.transunion.com
Other tools are available, depending on the agency you are working with. Security Freezes or Fraud Alerts can come in very useful if you were to ever have cause to doubt that your financial information was completely secure.
For instance, if a computer that was used to process credit cards was stolen from a company that you do business with, or if your wallet or purse was stolen, it would be a good idea to use this. These alerts cost nothing, and for a certain amount of time, it will put a note on your credit report to anyone extending credit to verify your identity before granting that credit in your name.