With Christmas come and gone, you may be dreading the sight of credit card bills. Regardless of your credit card debt, the new year is a good time to check your credit history. What you don’t know about your own credit history may kill your opportunities for future borrowing.
If you plan on applying for a new job or applying for a credit card, car or home loan, you may want to check your credit report first. A 2004 report by the U.S. Public Interest Research Group found one in four credit reports have serious errors which could significantly lower your chances of being approved for a loan or credit card.
Employers and potential creditors will look at your credit report as an indication of your character and credit-worthiness for short and long-term loans such as a credit card, car loan, or a home loan. Even if you think you have good credit, begin the new year by checking the facts on your credit report anyway. Your credit report will outline your full credit history. And, it can help you verify that you have not been the victim of identity theft.
Establishing good credit or bad credit takes time. As does fixing errors which appear on your report. Discovering these problems while sitting in your bank’s loan office is no way to win.
An amendment to the Fair Credit Reporting Act and the Fair and Accurate Transfers Act (FACT) now requires each of the consumer reporting agencies to provide you with a free copy of your credit report once each year. To get a complete look at your credit report card, you’ll need to request a copy from each of the credit reporting bureaus, Equifax, TransUnion, and Experian.
Your credit report includes both personal and credit repayment history. Included in the personal information section is your name, address, social security number, current and previous addresses, and employment history. I recently checked my credit history and discovered that one of the digits of my social security number had been incorrectly entered on an account. It was listed as an SSN alias in the report.
The bulk of your report outlines your current lines of credit, your payment history, and any potentially negative items such as companies who have denied your requests for credit. It also lists companies who have requested your credit history and any companies you have authorized to view your credit for business or insurance purposes. Review this information for accuracy.
To request your free credit reports, visit the central source for free on-line credit reporting at www.annualcreditreport.com. From that site, you can view a copy of your credit report from one or all of the bureaus. Or, call toll-free (877) FACT-ACT to request your free annual disclosure from the agencies. Your report will be mailed to you within 15 days.
For verification purposes, you will be asked a series of security questions. In my case, I was asked how much my mortgage payment was each month, what county I lived in and the make and model of my car.
Beware of bogus credit companies claiming to offer free credit reports. Entering the wrong web address may land you at a bogus credit reporting site. These sites claiming “free” credit reports may be a trap to garner your personal information. Remember, there are only three official credit reporting agencies.
Each of the three credit bureaus will try to sell you a detailed report of your credit. Some offer credit reporting packages for as little as $5.95 or as much as $68.70. You do not need to purchase these products. Proceed carefully on the websites and click only on the free credit report offer.
To get the maximum benefit, stagger when you check your free reports throughout the year. Your spouse is entitled to free credits reports as well. By alternating with your spouse, you can check your shared credit every two months.
|Schedule for checking your credit reports|
|January||You request a report from TransUnion|
|March||Your spouse requests report from Equifax|
|May||You request a report from Experian|
|July||Your spouse requests a report from TransUnion|
|September||You request a report from Equifax|
|November||Your spouse requests a report from Experian|
You may be entitled to more than one free credit report this year. If you were denied employment or insurance, if you are on welfare, if you have been a victim of identify theft, if your request for credit has been denied, or if you are unemployed and plan on looking for a job within the next 60 days, you may request a second free credit report from each credit bureau.
Photo by Two Paddles Axe and Leatherwork on Unsplash