A credit report is your financial report card on how you manage your finances. A credit report is compiled by the three major credit reporting agencies: Equifax, Experian and TransUnion. This report contains your history of paying bills, how much debt you have, how long you’ve had accounts and more.
Your credit report helps lenders decide if they’ll give you credit or approve a loan. The reports also help determine what interest rate they will charge you. In many cases others will see your report like your employer, rental owners, and insurers.
The three credit reporting agencies (CRAs) collect this data and maintain this information for financial institutions, like a bank, to make credit based decisions on your behalf.
It is very important that you review your report periodically to avoid any potential mistakes or even fraud.
Fun Fact: Per the FTC, 1 in 5 people have an error on their credit report.
How to Check Your Credit Report
There are a few ways you can check your credit report. The most often used one is the free annual report but you can take advantage of credit monitoring services like Credit Sesame, Credit.com, and others.
Annual Free Credit Report
You are entitled to a free credit report from each of the three CRAs (Equifax, Experian and TransUnion) every 12 months. You can request all three reports at once or space them out throughout the year.
The easiest way to get a free annual credit report is to use the website: annualcreditreport.com.
If your request for a credit report is denied then you’ll need to contact the CRA you’ve requested the report from directly. The CRA will tell you the reason they denied your request and give you steps on what to do next. In many cases people are denied because they are too early on the request or they want to verify more information before sending the report.
If you're having trouble getting your report and the CRA isn't helping you, contact the Consumer Financial Protection Bureau (CFPB).
Credit Reports & Monitoring Services
You can expect to pay anywhere from $9.99/mo to $29.99/mo for credit monitoring and reporting from a third-party service.
How to Read a Credit Report
Each of the credit reporting agencies organizes their information their own way. However, all three of the agencies will report on the same thing and your credit report will be broken up into similar sections. You’ll want to make sure you review each one carefully to make sure the data is correct. Any issues in your credit report can be a hassle to clear up later on the longer you wait to refute them.
Some of the data you’ll be exposed to is:
- personal information
- employment information
- address information
- credit card and loan payments
- list of inquiries
- collections records
Your personal information on your credit report will include names you’ve used, current and previous addresses, phone numbers, social security number, birth date, current and previous employers.
You shouldn’t be surprised if there are a few different spellings of your name. The agencies collect all of the data you submit when you apply for a credit card, loan, or anything else that requires a credit check and if you’ve used a different name for each – they’ll have it.
It’s not a big deal if you’re missing some employment information, like a telephone number, but you should keep an eye out for any data you don’t recognize. For instance, let’s say you have never worked for a specific company and it is now showing up on your credit report. You’ll want to dispute something like this immediately.
You’ll stumble on a section that lists every single account you have that have not gone to collections or been defaulted on. This is your current standing, as reported by the agencies, with all of your open lines of credit.
Each account will have a summary but make sure you recognize the data they have attached to it. You’ll want to verify:
- Name and address of the creditor, account number and date opened.
- Status of the account (open, closed, transferred, etc.).
- Type of account (credit card, student loan, auto loan, etc.).
- Individual, joint, or authorized status.
- Credit limits or original amount of installment loan.
You’ll see balance information with each of the these accounts along with payment information. The thing to look at here is to make sure your creditor is sending account data to the bureau you’ve pulled the report for. Each creditor reports to the agencies at different intervals but most try to do it either at the start, end, or middle of the month.
You’ll want to make sure your payment history doesn’t show an errors, like showing a late payment that you can verify you paid on time. You’ll want to make sure your account limits are correct because that weighs heavily on your credit utilization ratio in your credit score.
A closed account may show up and will stay on your report indefinitely if it’s in good standing. If it’s not in good standing you should see these accounts fall off 7 years after it first went delinquent.
Negative Information (Delinquent, Collections, Defaulted, etc.)
There will be a section discussing any negative accounts on your report. If you have accounts that you haven’t paid or are currently delinquent on they will show up here.
Negative information will typically stay on your credit report for at least 7 years.
You’ll want to review every account in this section, similar to your good standing accounts, and make sure all of the information is correct. It happens quite often where an account doesn’t drop off the report when it should or if a creditor hasn’t reported that you’ve paid off a debt.
This section will list when someone has checked your credit. You’ll see inquiries from when you applied for a new credit card, loan, or even for credit limit increases.
You’ll see these broken up into two types of inquiries: Hard and Soft.
A hard inquiry happens when you authorize a potential creditor to check your file as part of an application. These can cause small, and usually temporary, dips in your credit scores.
A soft inquiry doesn’t affect your credit score and happens when you check your own credit or a potential creditor sees if it wants to send you a promotional offer.
Both of these types will include basic information about who requested you score or report in the form of a name, address, and date of request. You should make sure all hard inquiries were authorized by you and that they fall of your report every 2 years.
Who Sees Your Credit Report?
There are only a few organizations that can actually see your credit report and most need authorization:
- Insurance Companies
- Government Agencies
These four bodies are able to freely access your credit report but most request authorization beforehand. The Fair Credit Report Act (FRCA) limits who can access the report and under what circumstances they are allowed to access it. So even though they can freely access your credit report, they still have to abide by federal law.
Anyone else that is not on this list will need your explicit permission to access your credit report and credit score.
What is a Credit Freeze?
A credit freeze allows you to restrict access to your credit report and is very important during a data breach or identify theft situation. If you’ve frozen your account then any creditor that tries to look up your information will no longer be able to do so stopping them from approving any possible fraudulent applications.
How to Place a Credit Freeze
In order to place a freeze on your credit you will need to contact each reporting agency individually. They all accept freeze requests online, by phone, or by mail. As soon as you request a freeze it will go into effect within 1 business day of the request. If you submitted via postal mail it can take up to 3 days for the request to be completed. Don’t rush to freeze your credit unless you’re certain you need to, a credit freeze doesn’t expire. It will stay in effect until you request a lift.
You can find the information for each reporting agency below.
Experian Freeze Center or 1-888-397-3742
Equifax Credit Report Services or 1-800-685-1111
TransUnion Credit Freezes or 1-888-909-8872
How to Lift a Credit Freeze
If your credit is frozen you won’t be allowed to let lenders or other companies use your credit score or report. You will need to request a permanent lift or a temporary lift. You’ll have to contact each agency again and some will require a PIN or other forms of identification to get the freeze lifted.
You are able to freeze and unfreeze your credit as you wish and there are no penalties in doing so. It will take a minimum of one hour for the lift to happen once you request it via phone or online. It can take up to 3 days if you submit it via postal mail.
How to Fix Errors on Your Credit Report
If you’ve found errors on your credit report you’ll want to dispute them. Any error can cause your score to be lower than it should be. Getting those negative items removed can be a very quick route to a higher score which can save you thousands on loans or insurance.
In order to fix errors, you’ll have to follow these steps:
- Review your reports and identify errors.
- Gather materials and support documentation.
- File a dispute with each bureau reporting false data.
- Review the response from the bureaus and handle accordingly.
Step One: Review Reports & Identify Errors
You’ll want to pull your credit report from all three reporting agencies and take advantage of your free annual credit report.
There may be small differences between each so it’s safe to ignore if one is reporting a line of credit and another is not. The key is that the information they are providing is correct.
You should look for:
- wrong account statuses (ex: payment mistakenly reported late)
- negative information that’s beyond 7 years old
- incorrectly listed on a loan or credit card
- wrong account numbers
- inaccurate credit limits or balances
Step Two: Gather Support Documentation to Back Claim
The types of supporting data you’ll need will depend on the error. These documents can range from account statements, original documents, bank statements, birth or death certificates to even a divorce decree.
The goal in this step is to make it as easy as possible for the CRAs to make a decision after an investigation. The more you have to support your dispute, or claim, the easier this process will be.
If you’ve been a victim of identity theft, there is a bit more to the process. You’ll have to submit a copy of your Federal Trade Commission complain or police report.
There is no cost to dispute an error and you can dispute as many items as you like. The agencies are not obligated to investigate claims you have no supporting documentation for.
Step Three: Dispute Errors
Each bureau has an online dispute process and we suggest you take advantage of it. It’s the fastest way to fix a problem. You can also write a letter or sit on the phone but you’ll likely have to call them back or follow up with more information. By doing it online you can submit all of your information and documentation in one spot.
- Use the Equifax online portal.
- Write to Equifax, P.O. Box 740256, Atlanta, GA 30374-0256.
- Call 866-349-5191 and follow the prompts to speak to an agent.
- Use the Experian online dispute form.
- Write to Experian National Consumer Assistance Center, P.O. Box 4500, Allen, TX 75013.
- Call 866-200-6020 to see if your dispute can be resolved by phone.
- Use the TransUnion dispute online help page.
- Write to TransUnion LLC, Consumer Dispute Center, P.O. Box 2000, Chester, PA 19016.
- Call 800-916-8800 and have a copy of your TransUnion credit report handy; the representative will need the file number.
Make sure when you submit your information to the above agencies you provide all documentation to support your case. You will also need to prove your identity and will have to submit your name, social security number, government-issued id, addresses, and a copy of a utility bill or bank statement that includes your address.
Step Four: Steps After a Dispute
Now that you’ve submitted your dispute and supporting documentation they must investigate your claim and tell you the outcome in writing. In most circumstances, they have to respond to you within 30 days.
There are two outcomes: there is an error OR they disagree.
If they agree there is an error they will remove the items and send you a new copy of your credit report. You’ll want to double check to make sure it’s still correct. You can also request that the bureau communicate the corrections to anyone who received your report in the last 6 months.
If they disagree then they will refuse to remove it from your report. If you are 100% positive it’s a mistake and you have sufficient evidence that is in your favor, you can go to the Consumer Financial Protection Bureau. You’ll have to explain your dispute and provide evidence and they will look into it themselves and will keep you updated. They will come to their own conclusion.