What is a credit report?
A credit report is a record of your credit activity and credit history. There are three major national consumer credit reporting agencies: Equifax, Experian and TransUnion. They each compile records of financial history that affect credit–in other words, a “credit report.” These reports contain information about your payment history, credit limits, loan balances, and other financial and personal information. For example, credit cards, student loans, mortgages, and auto loans all appear on credit reports.
Here are 5 reasons why you need to check your reports:
- Credit reports have a big effect on your financial life. They affect rental applications, mortgage rates, credit card approvals, auto loans, and other credit products. Consequently, they make an impact on the choices you have.
- Mistakes are frequently made on credit reports. For example, you paid off a loan, but your report lists the loan as in collections. Or, the report lists addresses and phone numbers you do not recognize. You have to check these details and make sure everything is correct.
- You are the only person who can tell these agencies if they made a mistake. No one else is watching your credit. Thus, if there is something wrong, you have to contact these agencies to correct it.
- Find out if someone stole your identity. Identity theft is a huge problem If there are any accounts that are not yours, you should report them to the FTC and to the credit reporting agencies ASAP.
- It’s free! You can get a free report from each agency every year.
What is the difference between a credit report and a credit score?
Your credit reports and your credit scores are not the same thing. A credit report is a statement that has information about your credit activity and credit history. On the other hand, a credit score is a number based on the information in your credit report. Higher scores reflect a better loan payment history and make you eligible for lower interest rates. Therefore, errors on your credit report can reduce your score. So, it is important to check your credit report and correct any errors.
How can I get a credit report?
Federal law requires each of the three nationwide consumer credit reporting companies – Equifax, Experian and TransUnion – to give you a free credit report every 12 months if you ask. You can request free copies of your credit reports from www.AnnualCreditReport.com. Importantly, this website is the only source authorized under federal law to provide free credit reports. Additionally, if you request the reports online or on the phone, the agencies ask several security questions to verify your identity.
Request your free credit report:
- Online: Visit AnnualCreditReport.com
- By Phone: Call 1-877-322-8228.
- By Mail: Complete the Annual Credit Report Request Form https://www.annualcreditreport.com/manualRequestForm.action and mail it to: Annual Credit Report Request Service – P.O. Box 105281, Atlanta, GA 30348-5281