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Ten Reasons
to get your Credit Report
- Never Seen It or Haven't Seen Your
Credit Report in Years?
If you have never seen a copy your credit report, you
definitely should order a 3-in-1 credit report, which includes your credit report from
Experian, Equifax, and TransUnion. Why a 3-in-1 credit report? The three national credit
bureaus do not communicate with each other, so you actually have three credit histories.
It is up to you to make sure that your credit histories are accurate, so you should get
all three of your credit reports.
- Mistakes DO Happen
Do you know who has had access to your credit report
information? Do you know if the information they saw is accurate? According to a study by
U.S. PIRG, 70 percent of the credit reports have errors of some kind and 29 percent
contained serious errors like false delinquencies and judgments that don't belong to the
consumer.
- You are applying for a credit card
If you are considering applying for a car loan, bank loan, or
credit card, you will want to see your credit report and make sure all information is
accurate. Since each inquiry can count against your credit rating, make sure that your
application isn't rejected based on mistakes in the credit report.
- Co-Signed a Loan
If you have co-signed a loan for a family member or friend,
their payment record will also appear on your credit report. Make sure you know how your
credit is affected.
- Mortgage-shopping
Before you start shopping for mortgage, take a look at your
credit report before the mortgage companies do.
- Renting
If you are going to be renting an apartment, especially in a
competitive market, it is wise to have a recent copy of your credit report with you while
apartment hunting. Most apartment owners or managers will want to check your credit report
before offering you a lease.
- Divorce
Your credit may be combined with your spouse, and there may be
certain transactions that you may not be aware of. If you get a divorce, notify the three
major credit-reporting agencies that your status has changed to "single."
Provide them with new addresses for both you and your ex-spouse. Specify that all accounts
should henceforth be reported separately. Otherwise, transactions may be reported on the
wrong spouse's account. The records could get tangled confused, especially if one of you
were to remarry. Occasionally, one or both spouses may experience credit problems during
the separation period preceding the final divorce, especially if marital assets are frozen
during settlement negotiations. You will need a copy of your credit report to review with
your attorney so that you can accurately evaluate how your divorce will affect you
financially.
- Fraud Monitoring
Someone may be committing fraud by using your identity and
applying for credit in your name. Credit reporting companies do not have to inform you of
suspect items, so it's up to you to be vigilant about your credit. You should regularly
check your credit report to make sure that all new inquiries and accounts are not
fraudulent. Make sure all information is accurate and if you suspect fraud, contact your
credit reporting agency and ask that they put a fraud alert on your file.
- Self-Employed?
If you have your own business, it is imperative that you
regularly monitor your credit condition. The stronger your credit, the greater your
ability to secure the financing you need to properly build and maintain your company.
- Financial Planning
If you use a financial advisor, it is recommended that you
check your credit report at least once a year and review it with him/her so your financial
condition can be accurately assessed.
What is in a credit report?
The following types of information are found in your credit report:
- Identifying information: includes
your name, nicknames, current and previous addresses, Social Security number, date of
birth, and current and previous employers. This information comes from any credit
application you have completed, and its accuracy depends on your filling out forms
clearly, completely and consistently each time you apply for credit.
- Credit information: includes specific
information about each account including the date opened, credit limit or loan amount,
balance, monthly payment and payment pattern during the past several years. The report
also states whether anyone else besides you (i.e. a spouse or cosigner) is responsible for
paying the account. This information comes from companies that do business with you.
- Public record information: includes
federal district bankruptcy records; state and county court records, tax liens and
monetary judgments; and, in some states, overdue child support payments. This information
comes from public records.
- Inquiries: includes the names of
those who have obtained a copy of your credit report for any reason. This information
comes from the credit reporting agency, and it remains available for as long as two years,
as per federal law.
While there are a number of good reasons to
order, review and master the details of your credit report, one primary truth cannot be
avoided:
Your credit report
is your electronic fingerprint.
You can't escape it. It will
always precede you. It represents your reputation in the personal financial community. If
it is solid, it can be one of your best assets. If it is damaged, it can be one of your
biggest liabilities.
The sad truth is that the majority
of Americans have never seen their credit reports, though their credit profile affects
practically every aspect of their financial lives. Even more disturbing is that of those
who have seen their credit reports, a significant number don’t understand what they
are reading.
Credit is not something to be feared, but rather a tool to
build financial security. It is simply a different kind of investment portfolio.
As more and more Americans put their funds into the stock
and bond markets, it is not uncommon to see people hunched over the morning newspaper,
watching one of the financial news networks, surfing the net checking out their portfolios
or doing research, or pouring over their monthly investment statements. Unfortunately,
few, if any, people realize that were they to dedicate just a fraction of the time they
spend reviewing their investments to working on the development of a credit portfolio,
they would dramatically enhance their ability to build the type of financial security they
are striving for.
Think of your credit report as the equivalent of an
investment statement. But just as you can’t know your entire financial picture
without reviewing statements from all of your investment accounts, you will not see your
entire credit picture unless you read a report from each of three (3) major credit
reporting agencies (Experian, Trans Union and Equifax). Because just as Merrill Lynch
doesn’t share your account information with Etrade or Schwab, none of the three (3)
national reporting agencies share information with each other. Therefore, simply seeing
one, or two, credit reports may not give you the entire picture.
There is, however, a way to see your entire credit profile
as reported by all three (3) bureaus one (1) report. It is known as a 3-bureau, or
triple-merged, credit report. And, since it reports each credit account you have and
indicates which credit bureaus report which accounts, you can finally see who knows what
about you.
There are services that combine all three
reports into one. These services offer a “merged & purged” credit
report which gives you the most detail about your credit. If you are applying for a
mortgage, you will want to know everything you can about your credit before you apply.
Credit411 (www.Credit411.com) offers these “murge & purged” credit
reports by mail.
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