Have you reviewed your credit report in the last 12 months? If not, you might be wise to set that reminder to line up with some other annual event like your birthday, routine physical exam, or on Free Slurpee at 7 Eleven Day – whatever suits you! The reason you want to pull your credit report is to verify only your information is on your report (be careful about 2 family members with the same name!), and to check for inaccuracies.
Here’s how to do it:
First things first, ordering your credit report is free – and you don’t hurt your score by pulling your own report. I like pulling scores from creditkarma.com – which has thus far proven totally free with no gimmiks. I’ve tried it for over a year now. In addition, their score closely matched that of the one provided by my employer. If you are on a site that wants to charge you, they are trying to get you to sign up for credit monitoring. Don’t. Just Don’t.
You can pull either Transunion, Equifax, or Experian credit reports by going to www.annualcreditreport.com. You may obtain one free report per year from each bureau. I like to spread them out so that I can get 3 reports at periodic times throughout the year. Order Transunion in January, Equifax in May, then Experian in September. By the time the next January rolls around, you are ready to order another Transunion report! That is your own way of doing free credit monitoring!
But what does it all mean? I don’t understand how to read this thing!
First – I will offer a free credit report review for anyone that needs help understanding what the report says. We can talk about steps to correcting incorrect information if needed.
Identifying information includes your name, current and previous addresses, former names, Social Security number, date of birth, and current and previous employers. I find the employment section is often out of date, but it really doesn’t matter. If anything else in this section is wrong, you’ll have to submit documents to verify the discrepancy and get it corrected. That is an urgent issue.
Public Records include Bankruptcy, Judgments, Foreclosure, Unpaid Tax Liens, Unpaid Child Support, and other public record information that may have been filed in the courts. Chapter 7 Bankruptcy remains on your credit report for 10 years after the filing date, and Chapter 13 remains for 7 years. If you have a Judgment that is paid in full, please checked to make sure that it shows as Satisfied. If it does not, you’ll want to contact the court where the judgment was filed to have that corrected.
Credit History is the meat and potatoes of your report. It shows all the loans you ever had and your repayment history. Good information stays on the report for 10 years from date of payoff (like on a student loan). Negative (late payment) information remains for 7 years from the last date of delinquency. In order to keep this fair for everyone, the Fair Credit Reporting Act states that negative information will be deleted after 7 years unless you prove that it is incorrect. Please don’t fall victim to scams that ask you for money to clean up your credit report. If your credit history is true, it must remain on the report for that 7 year period. Here you don’t just want to look at payment history for accuracy, but also the line of credit, and the current balance.
Inquiries are all the times you have requested someone pull your credit. This can be a bank when you open an account, or apply for that card to save money at the checkout in Kohl’s. Inquiries come in two forms – soft inquiries and hard inquiries. I’ll get into that more in a later post, but know that inquiries stay on your credit report for 2 years from the date of inquiry. They show how desperate you have been to get loans recently (or not!). If you apply for a car loan or mortgage, you can have a much higher number of inquiries to shop around for the best rate, and they only count the inquiries as one since you were doing your due diligence and shopping for the best rate! If you have pages and pages of inquiries, you need to get your name off of the prescreened credit offers! Do this by registering at optoutprescreen.org
Next up: Credit Scores – Stay Tuned!
Image courtesy of Stuart Miles / FreeDigitalPhotos.net