There are three major credit reporting agencies within the United States: Equifax, TransUnion, and Experian. These are the organizations that lenders use to check the creditworthiness of potential borrowers.
Federal law says that individuals can receive one copy of their credit report from each of the three bureaus annually and free of charge. It’s a good idea to review it once a year to make sure there are no errors or omissions.
How do you read a credit report? There are abbreviations, numbers, and codes, and for people looking at them for the first time, they can be a bit confusing.
Obtaining credit reports
To get your free credit reports each year, you can visit http://www.annualcreditreport.com, which is the only authorized source for free annual credit reports under federal law effective September 1, 2005. If you go directly to credit reporting agencies, credit reports, you will be charged to view your report, unless you qualify for other criteria to view a free report (for example, being denied credit).
If you want to check your credit report more often than once a year, you can sign up for reports at any of the three credit bureaus and pay about $10 per report. Unfortunately, you’ll want to see the report at all three agencies because the information isn’t exactly the same and you need to check all locations for errors.
reading credit reports
Credit reports are divided into four different segments: individual identification information, credit history, public records, and credit file inquiries.
Identification information must include your name and address, and social security number. If you see some variations of your name or more than one social security number, it’s because one of your creditors reported it incorrectly, but that information should remain because removing it can damage the connection between the report and the creditors who use it. .
Identifying information also includes your employer(s), driver’s license numbers, and sometimes your spouse’s name.
Credit history includes a list of individual accounts and account numbers (which may be encrypted). The information for each account will usually show the date it was opened, the type of credit (mortgage, auto, installment, revolving), the total amount of your loan and the amount you still owe, as well as the status of the account. account (open, closed, paid as agreed, inactive) and how you’ve been making payments on the account (on time, 30 days late, 90 days late, etc.).
Public records is a section that you expect to contain nothing. This section provides details about bankruptcies, tax liens, and judgments. This section will lower your credit score faster than anything else.
The inquiries provide a list of “hard” inquiries (credit you have applied for that may affect your credit score), although FICO ignores most inquiries when obtaining your scores for individuals and “soft” inquiries from credit card lenders who check your file. before sending credit card promotional offers. Soft questions do not raise or lower your credit score.
What to do about errors on your credit report
If you find errors on your credit report, such as incorrectly reported amounts on an account or an account that doesn’t belong to you, you can complete the dispute form included in a mailed copy of a credit report or use an online form. online dispute dispute form.
The information must then be verified by the credit reporting agency within 30 days of filing the dispute (or the error must be removed). If they find it to be correct and you still disagree, you can contact the creditor directly to have it corrected. If they find that the information you have disputed is incorrect, they must remove the item from your credit report.
No Comment