Your Credit Report
If you have ever applied for a credit card, a personal loan,
insurance, or a job, there is probably a company keeping a credit file
or credit report about you. This file contains information about where
you live and work, how you pay your bills, or whether you have been
sued, arrested, or have filed bankruptcy.
Companies
that gather and sell this information are called “Consumer Reporting
Agencies” or “Credit Bureaus.” The information sold by Consumer
Reporting Agencies to creditors, employers, insurers, and other
businesses is called a “credit report.”
Your Credit Report: What You Need to Know
Who issues credit reports?
There
are three major Consumer Reporting Agencies and many small ones. Most
lenders buy your credit report from the “Big Three”: Experian,
Equifax, and TransUnion.
What information is in your credit report?
- Personal information such as your name, birth date, Social Security Number, recent home address, and recent employers
- Payment history on your credit accounts
- A list of creditors who have recently requested copies of your report
- Public records, such as bankruptcy, foreclosure, and court judgments
How long can information stay on your credit report?
- Most negative information can stay on your report for seven years
- Bankruptcy can stay for ten years
- Criminal convictions can stay on your report indefinitely
- Some student loan information can stay on your report longer than seven years
- Positive information can stay on your report indefinitely
Do credit reports contain mistakes?
Unfortunately, yes. U.S. PIRG,
an AFFIL Partner, found that 25% of credit reports contain serious
errors that could result in the denial of credit, and 79% contain a
mistake of some kind. You can take steps to correct your report, which
we will explain below.
Who can legally see your credit report and score?
- Lenders
- Insurance Companies
- Some Government Agencies
- Landlords
- Employers (but they must ask your permission first)
Your Credit Score: The Basics
Your credit score is a number which is supposed to convey how likely you are to repay a loan.
While
there are many different credit scores , the most common is the “FICO
Score.” FICO stands for Fair Isaac and Company, which is the company
who develops these scores. A FICO Score is generally between 300 and
850, and the higher the score, the better. If your score is above 700,
you are generally considered a good credit risk, whereas if your score
is below 600 you are considered high risk.
What information affects your FICO score?
- Your payment history on credit accounts
- Amounts owed
- Length of credit history
- Types of credit used
- Recent inquires and accounts
What does NOT affect your FICO score?
- Your race, religion, sex or marital status (prohibited by federal law)
- Your age
- Employment information
- Inquires
on your credit report from you, employers, lenders making promotional
offers, or lenders reviewing your current accounts
Ordering Your Credit Report
Why Should I Order My Credit Report?
Even
if you are not experiencing credit problems, it is a good idea to check
your credit report. In particular, you should check to make sure the
information is accurate, complete, and up-to-date before you apply for
a loan for a major purchase such as a house or car, buy insurance, or
apply for a job. Ordering your report can also help you guard against
identity theft, which is when someone uses your personal
information—like your name, Social Security number, or credit card
number—to commit fraud.
How Do I Order My Free Annual Credit Report?
Everyone
has a right to a free credit report once every twelve months from each
of the Big Three. You can request your report in three ways:
Important! Do
not contact Experian, Equifax or TransUnion directly for your free
report. Use one of the three services above, as the Big Three are only
providing free annual reports through these services.
Important! We suggest that you order your free credit report by phone or mail, not online.
If you order by phone or mail, you will receive a paper report that has
more information and is easier to read than the electronic version.
What information do I have to provide to get my free credit report?
You
will need to provide your name, address, Social Security number, and
date of birth. To verify your identity, you may be asked to provide
some information only you would know, such as the name of your credit
card company.
Will the free credit report include my credit score?
No. But you can purchase your credit score when you order your free report.
Can I obtain free credit reports more than once per year?
Yes, in certain situations. You can get another free credit report if:
- You
have been denied credit in the last sixty days. However, you can only
get a free report from the company (or companies) whose reports were
used in the decision to deny you credit.
- You are unemployed and intend to seek employment within sixty days.
- You are on public assistance.
- You believe your report contains inaccurate information due to fraud.
- You are the victim of identity theft and you place a “Fraud Alert” on your account.
Reading Your Credit Report
Click here to download a pdf by NEDAP, an AFFIL Partner, about reading your credit report.
Correcting Your Credit Report
What can I do if my credit report contains errors?
You should tell the Consumer Reporting Agency in writing about the errors. Click here to download a Sample Credit Report Dispute letter and instructions by NEDAP. NEDAP also provides a Sample Followup Letter. Use these resources to ensure that your credit report is corrected.
The
Consumer Reporting Agency you write to must investigate your claim and
forward all relevant data to whomever gave them the incorrect
information. Usually, they must do this within thirty days. The
information provider must also investigate your claim and report back
to the Consumer Reporting Agency. If the information provider finds
the disputed information is inaccurate, it must notify all three
nationwide Consumer Reporting Agencies so that they can correct this
information in your file.
When the investigation is
complete, the Consumer Reporting Agency must give you the written
results and a free copy of your report if the dispute results in a
change. (This free report does not count as your annual free report.)
For more information about this topic, see “Correcting Your Credit Report” by NEDAP.
What can I do if the Consumer Reporting Agency or information provider refuses to correct the information I dispute?
If
an investigation doesn’t resolve your dispute with the Consumer
Reporting Agency, you can ask that a statement be included in your file
and in future credit reports. You can also ask the Consumer Reporting Agency
to provide your statement to anyone who received a copy of your credit report
in the recent past. You will probably have to pay a fee for this
service.
You can also contact a Fair Credit Reporting Act lawyer. Visit the National Association of Consumer Advocates (an AFFIL Partner) for help, or use our Local Resource Search to find an AFFIL Ally.
