Have you ever wondered what information is on your credit report? You should. Your credit report defines your entire reported credit history and is a major determining factor in your future credit worthiness.
You may want to consider monitoring your credit report at least once a year, if not once a quarter, to make sure it's accurate and up to date. Take the necessary steps to report any errors you find immediately: Mistakes and omissions still affect your credit score!
Safeguard against identity theft
Another reason to check your credit report is to safeguard against identity theft. The Federal Trade Commission (FTC) estimates that 9 million Americans have their identity stolen each year. Your credit report will show if someone has opened a credit card account in your name. Not only will the new account be listed, but also the amount owed or delinquent on the account. (Yes, delinquent. You can be sure that the thief opening credit cards in your name isn't paying the bills.)
If you suspect you've been the victim of identity theft, you'll need to place a fraud alert on your credit report, close those accounts, as well as file a police report and a complaint with the FTC.
Get your free credit report
The Fair Credit Reporting Act guarantees you a free credit report once a year, by law, from each of the three national reporting agencies, or credit bureaus: Equifax, Experian, and TransUnion. Why all three? Your credit score and report may vary by agency, depending on the information it has received from lenders.
AnnualCreditReport.com is the only authorized website for ordering free credit reports through the Fair Credit Reporting Act; all others making such claims have been known to either charge a fee or require you to buy other services to receive a "free" credit report.
It's important to note that only your credit report is free. You can purchase your credit score directly from the credit bureaus or from FICO (formerly known as Fair Isaac Corporation), the company that created the first credit score system. The fee for a one-time look at your credit score is about $15 for one credit bureau's score and report, and $40 for scores and reports from all three. Some credit card issuers offer customers free FICO score reports.
Use a monitoring service
Keep in mind that there is a difference between a credit report, which is often free, and your credit score, which you may have to pay for. You can also use a monitoring service to monitor your credit reports daily. These services, which cost around $15 a month from the credit bureaus and FICO, alert you when your credit score changes and monitor all three of your credit reports for the following:
- New accounts
- Credit inquiries
- Increases in balances
- Changes in account status
- Inactive accounts becoming active
- Changes to and new public records and collection agency records
- Name changes
- New addresses and phone numbers
Many people find this type of service useful and worth the price because they're immediately tipped off about any fraudulent activity.
Whether you're checking your credit report or score quarterly or annually, or having it monitored for you more frequently, only use an agency authorized to provide credit reports. Credit inquiries by unauthorized agencies may lower your credit score in the short term.