If you’re serious about your finances, you need to be aware of your credit situation. And the best way to do that is with a credit report. Luckily, you can access your own personal credit report for free! Read on to learn more about how to understand your credit report and use it to your advantage!
Table of Contents
What is a Credit Bureau?
A credit bureau is a special type of agency called a consumer reporting agency or CRA, that collects data about you and how you handle money. There are several credit bureaus, but they all have a similar function – they keep track of when you applied for loans or credit, the amount of money you applied for (and how much you received), and, most importantly, how well you pay your bills on time.
Credit bureaus also track if you’ve ever left a credit account unpaid, and how much you owe to those creditors.
Credit bureaus then provide that information to various entities, like mortgage lenders, car loan companies, credit card companies, and other businesses. Typically, any time you apply for credit, that business will contact one or more of the credit bureaus to see if you’re a good credit risk or not. The information that the credit bureau sends to the loan company is in the form of a credit report.
What is a Credit Report?
Think of your credit report as the biography of your money life. It contains all the information that the credit bureaus collect about your financial and bill-paying habits over time. A credit report includes:
- Your current and previous addresses
- Your creditors (who you currently owe) and the details of those transactions
- Credit accounts you’ve had in the past
- Your loan application history
- Your bill repayment history
- Whether you’ve filed for bankruptcy or had tax liens in the last 10 years
- Other facts about your credit and financial life
How Can You Obtain a Copy of Your Credit Report?
Getting your credit report is easy! You can request your credit report directly from the credit bureaus. You are allowed one credit report per year free of charge from each of the following credit bureaus:
- Equifax. The address is, P.O. Box 740241, Atlanta, GA 30374-0241. Their phone number is: (888) 766-0008.
- Experian. The address is, P.O. Box 2002, Allen, TX 75013. The phone number is: (888) 397 3742.
- Trans Union. The address is, P.O. Box 2000, Chester, PA 19022. The phone number is: (800) 916-8800.
You can also obtain your credit report online. Be careful – there are many websites that will try to get you to pay for your report. There is one official site for you to retrieve your free yearly credit report – https://www.annualcreditreport.com.
If you find different information in the credit reports from the different credit bureaus, don’t panic! Banks and creditors often use just one of the credit bureaus, so that loan you took out might just be reported to one bureau, not all three. This is also why it’s important to pull reports from all three bureaus annually.
Why Should You Obtain a Copy of Your Credit Report?
The best way to be informed about your finances in terms of managing loans and payments, you should get a copy of your credit report at least annually. Loan companies will pull your credit report when you apply for a loan, so it’s a good idea to know in advance what they’ll be seeing. That gives you an opportunity to fix any errors or mistakes before it becomes a problem.
Remember, the data in your credit report can be used to determine not only if you get a loan, but also the interest rate that you’ll pay on the loan. The better your credit history, the better loan terms you can receive. Your credit report can save you hundreds or thousands of dollars on your loans.
Another reason to know what’s in your credit report is because more and more, companies look at your credit report before doing any business with you – this includes potential employers, cell phone companies, and insurance providers.
If your personal information is ever compromised – if your credit card or bank account is hacked, or you’re a victim of identity theft – you need to know right away, and monitoring your credit report is a good way to do this.
Finally, credit reports can often have mistakes in your file. It might have your name or address wrong, or it could have a loan that you didn’t apply for or show late payments when there weren’t any. Whatever the situation, it’s important to keep track of the information in your report to know that it reflects you accurately. If you find mistakes, you can have those corrected or removed.
How Long Does Information Stay on Your Credit Report?
Typically, all credit information, whether good or bad, will remain on your credit report for seven years. Personal bankruptcy remains on your credit report for 10 years.
Is a Credit Report the Same as a Credit Score?
Your credit score is one part of your credit report
Your credit report is a record of all your financial transactions. It contains details about you and your creditors. By contrast, a credit rating, or credit score, is a snapshot of your financial “worthiness.” Agencies that produce credit ratings look at everything in your credit report and distill it into a single number – a credit rating or score. This score is essential when applying for a loan.
Lots of companies will try to sell you access to your credit score. But there are ways to get your credit score for free. Some credit card companies include your credit score as part of their customer service, so check there first. Here is a partial list of credit cards that offer FICO scores or Vantage Scores for their members.
Protect Your Financial Future
When you think about it, using “credit” essentially is leveraging your future earning potential today. Knowing what’s in your credit report will give you a glimpse into your financial future. To maintain the best possible future for yourself and your family, it’s essential to be familiar with credit reports.
Furthermore, knowing what credit bureaus do, what credit reports are and how to obtain them, is critical for having a successful financial life.
Need Help with Your Credit Report?
If you’ve found problems with your credit report (mistakes or inaccurate information), or if you just don’t understand what you’re looking at, give us a call. We can help you walk through your credit report to know what’s going on and, if there are issues, how you can fix them.
We also specialize in credit repair for those people who have no credit, limited credit, or bad credit. This is especially important if you’re considering applying for a home or car loan in the future. Contact us to get started on the process!
