A credit report is your financial report card on how well you manage your finances and pay your bills. A credit report is compiled by the three major credit reporting agencies: Equifax, Experian and TransUnion.
The report(s) contain your history of paying bills, how much debt you have, how long you’ve had accounts and more.
Along with your credit score, a credit report is used by lenders to help make credit worthiness decisions on if they should lend you money or extend credit. In many cases there are others who will see your credit report like your employer, rental owners, and insurance agencies.
How to Check Your Credit Report
There are a few ways you can check your report. The most used one is the free annual report but you can also take advantage of purchasing direct or using a credit monitoring service like Credit Sesame, Credit.com and so on.
Annual Free Credit Report
You are entitled to a free credit report from each of the three credit reporting agencies (CRAs) every 12 months. You can request all three reports at once or space them out throughout the year.
We suggest spacing them out and getting a report every 4 months just to stay on top of everything.
To request your free annual report, go to annualcreditreport.com.
If your request for a report is denied you’ll need to contact the credit bureau directly for the report you’re requesting. The agency will tell you why you were denied, which is most likely due to requesting your report too early or ID verification, and give you next steps on what to do.
Credit Reporting & Monitoring Services
A credit monitoring service, like Credit Sesame, is a great way to stay on top of your credit and get alerts if anything in your report has changed. A credit monitoring service acts as a watchdog and also a personal assistant as it relates to your credit. It will watch for any issues and even offer up ways for you to improve your score by taking advantage of the scoring models.
For example, if you have a lower credit limit there is a good chance they will tell you to raise your credit limit by either requesting a raise or adding another card. By doing so you will increase the amount of credit you have, add another credit line to the mix and so on.
You can expect to pay anywhere from $9.99/mo to $29.99/mo for credit monitoring from a third-party service for most of them but there are several free options out there with limited capabilities.
How to Read a Credit Report
The credit reporting agencies all record their information in their own way but all three agencies report on largely the same items. Your credit report will be broken down in similar sections from each agency. You’ll want to make sure you’re reviewing each bureau as they all won’t always have every account in your report. Any issues in your credit report can be a hassle to clean up the longer you wait to refute them.
Your credit report will have information like:
- personal information
- employment information
- address information
- credit card and loan payments
- list of inquiries
- collections records
You’ll find all of your current and historic personal information in the report. This ranges from names you’ve used, current or previous addresses, phone numbers, your social security number, birth date, current and previous employers.
You shouldn’t be surprised if you see some potential errors or even misspellings here. Every time you submit an application the agencies get the data and log it to your credit report. It’s not always a big deal if you’re missing some employment information but if there is any data you don’t recognize or think you should update, you should reach out to the agencies as soon as you can.
This is the meat of your credit report. This should be a list of every account under your name that hasn’t gone to collections or been defaulted on. This is what the agencies view as your standing with each account, you’ll want to make sure everything is correct.
Each account will have a summary but you’ll want to verify information:
- 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.
Aside from the above, you’ll want to make sure all of your balances are correct along with any, and all, payment information. You want to make sure your accounts are sending the right data and that everything is correct. There have been cases where some creditors reported late payments by accident and you’ll want to double check every payment.
Negative Information (Delinquent, Collections, Defaulted, etc.)
This section will disclose any and all of your delinquent accounts, if you have any. These accounts typically stay on your report up to 7 years. You’ll want to review this section similar to how you would your active accounts and verify all information, payments, balances, etc.
It happens quite often where an account doesn’t drop off a report when it’s supposed to or that a creditor hasn’t reported a debt you’ve paid off.
The bureaus will report everyone, and agency, who has checked your credit. You’ll see inquiries from when you applied for a new credit card, loan, or even if you’ve requested a credit increase.
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. Then can, and usually do, cause small dips in your credit score that returns over time.
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 (they don’t pull your full report).
You’ll see basic information about who requested your data. You’ll want to make sure it’s all legitimate and not someone accessing your credit that shouldn’t be.
Who Sees Your Credit Report?
Not everyone has access to anyone’s credit report. In fact, only a select few organizations can even access someone’s report and even though they have federal permission they still need your permission most of the time.
Organizations that can see your report are:
- Insurance Companies
- Government Agencies
The Fair Credit Report Act (FRCA) limits who can access the report and under what circumstances they are allowed to access it. If someone isn’t on this list, or doesn’t abide by the Fair Credit Report Act, they 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 identity 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 credit freeze you will need to contact each reporting agency individually. They all accept freeze requests online, by phone, or by mail. Requesting a freeze online is the fastest way to get one into effect. It typically takes 1 business day for it to happen. If you submit by mail, or even by phone, it can take up to 3 days for it to be processed.
Note: A credit freeze does not expire.
You can find information for each reporting agency below to submit a credit freeze:
Experian Freeze Center or 1-888-397-3742
Equifax Credit Report Services or 1-800-685-111
TransUnion Credit Freezes or 1-888-909-8872
How to Lift a Credit Freeze
To lift a credit freeze you will follow the same process to place one. The agency may require more information or some form of verification before they’ll lift it. You can request a temporary or permanent lift.
You are able to freeze and unfreeze your credit as you wish as there are no penalties in doing so. The lift tends to happen faster than placing a freeze and you can even see the lift within 1 hour of request.
How to Fix Errors on Your Credit Report?
If you have found errors on your credit report you’ll want to dispute them immediately. Any error can cause your score to be lower than it should be and getting those negative items removed can be a quick way to improve your score.
In order to fix the errors you’ll have to follow some 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 each bureau and handle accordingly.
Step One: Review Reports & Identify Errors
You’ll want to pull your report from all three reporting agencies. Be sure to take advantage of your free annual credit report.
There may be small differences between each report so it’s safe to ignore the small things. You’re really on the look for major items.
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 Supporting Documentation
The types of supporting data you’ll need will depend on the error. These documents 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 for an investigation. The more you have to support your dispute the easier this process will be.
If you have been a victim of identity theft there is a bit more to this process.
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 it’s highly suggested you take advantage of it. It’s the fastest way to fix the problem. You can also write a letter or handle it via phone but it will more than likely take multiple communications and an extended amount of time.
You can submit your information in the following ways:
- 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.
You’ll want to make sure you provide all the documentation to support your case and your identity. You will have to submit your name, social security number, government-issued ID, address and a bunch of other stuff to verify who you are.
Step Four: Steps After a Dispute
After you’ve submitted your dispute it becomes a waiting game. There are only two outcomes: they agree or they disagree. They are required to send you their decision in writing within 30 days of the request.
If the agencies agree they will remove or adjust the items in question and send you a new copy of the report.
If the agencies disagree they will refuse to remove it from your account and then it’s up to you on how to handle it. If you think they were mistaken and you have sufficient evidence you can go to the Consumer Financial Protection Bureau and explain your dispute and provide evidence for them to look into.