A credit report gives a detailed history of how you manage your debts, almost serving as a report card to a potential lender.
Banks and other financial institutions usually look at both your credit report and your credit score when deciding whether to lend you money and the rate you should be charged. It is very important to review your credit report to ensure that it contains accurate information.
However, a recent survey from the Association of International Certified Professional Accountants showed that one in three Americans has never checked their credit report.
Surprisingly, 68% of people who checked their credit reports found at least one, and in some cases, several inaccuracies on their report. This can lead to higher interest rates on your loan, or possibly a loan denial altogether.
It’s important to know what to look for on your report, as well as what to do if you have inaccurate information on the report.
How to get your credit report
Typically, consumers can get a free credit report every 12 months from each of the three major credit bureaus: Equifax, TransUnion and Experian. But during this pandemic and until April 20, 2022, consumers can receive one each week if they wish. You can get them at AnnualCreditReport.com, or contact each office individually by phone, mail or on their website. When a data breach occurs, breached consumers may also be offered free copies of their credit report.
How to read your credit report
Credit reports from all three bureaus will likely show up slightly different from each other as all data may not be fully available for all three offices. But most credit reports provide much of the same information:
- Personal information, such as your name, address, and social security number
- Public records, including judgments rendered against you and when items will fall from your report
- Accounts not in good standing, including any recovered
- Accounts in good standing, including those that have been paid
- Revolving accounts (mostly credit cards), including monthly payment history
- Credit inquiries—companies that have requested your credit history as part of a loan application, tenant screening, etc.
When reviewing your credit report, take a very close look at your public records, accounts that are not in good standing, and revolving accounts. Resolve any discrepancies as soon as possible.
Also, look for any unauthorized credit inquiries. If these appear, it may mean that someone is using your information without your consent. Report any false claims to each of the three credit bureaus. But also work to uncover where that information may have been used to deter long-term identity theft.
How to report an error
File a dispute with the credit bureau if you notice an error on your credit report. If the error occurs on multiple reports, submit a dispute to each office individually. Disputes can be filed online or by mail. If you choose to file by mail, be sure to include any documents to support your application, such as bank statements or receipts. Send your dispute letter detailing the nature of the dispute, then ask for an acknowledgment that will give you assurance that the credit bureau has received the dispute.
You may be contacted by the credit bureau for additional information about the dispute. You will receive a notification when your dispute has been reviewed. If approved, inaccurate information must be corrected within 60-90 days. If the dispute is not approved, the file will remain on your credit file until you can provide sufficient evidence to support your claim.