You are entitled to one free credit report from each of the three credit reporting agencies each year. You can do this by visiting www.annualcreditreport.com. This is the only authorized free credit report service. All others are impostors. Although you can request all three reports at the same time, you can monitor your credit more frequently by spacing the reports throughout the year. Additionally, if you are turned down for credit, insurance, or employment, you are eligible for an additional free report from the agency they consulted. To request this report, contact the appropriate agency within 60 days.
What are the Three Credit Reporting Agencies, and How Can I Contact Them?
P.O. Box 740241
Atlanta, GA 30374-0241
P.O. Box 2104
Allen, TX 75013-0949
P.O. Box 1000
Chester, PA 19022
Establishing credit is only part of the equation. Another part of the puzzle involves how your credit history is used by others who make decisions about you. For example, your credit history will determine whether or not a lender will loan you money for a house or car and what interest rates you will pay if they do loan you money. You credit history may also determine what rates you will pay for car or home insurance, whether or not an employer will hire you for a job and whether you will be able to rent you an apartment.
Your credit history is available for you and others to look at in a credit report. In this section you will find answers to these questions:
What is a Credit Report?
A credit report contains vital information about your credit history. Any loans and credit card accounts and balances, as well as the status on those accounts (i.e. pays as agreed, late, missed etc.) are detailed. Three major credit reporting agencies or bureaus are Trans Union, Equifax and Experian. They collect and report information about your financial habits and put the information into a credit report.
Each agency’s report contains the same basic information: name, Social Security number; current and previous addresses; details about loans and how they’ve been handled, public record information, such as bankruptcies, court judgments or liens and companies that have reviewed your credit report.
How can I check my Credit Report?
All Americans are entitled to a free credit report every 12 months, from each of the three major credit bureaus. The free credit reports come as a result of the passage of the 2003 Fair and Accurate Credit Transactions Act. The reports will not automatically be sent out. Consumers who want their credit reports must initiate the request in one of the following three ways:
Go to www.annualcreditreport.com, which is the only authorized source for consumers to access their annual credit report online for free. Be careful not to make a mistake in the URL — some opportunistic entrepreneurs have staked out the URLs that are close in spelling, and they’ll try to sell you the reports, instead of giving them for free. Also, be cautious of web sites offering “free” credit reports. Many of them are only free for a short period of time and then you get charged. Always read the fine print before buying a credit product that you may not need.
Also, be certain that you are requesting your credit report and not your credit score, there is a difference. Typically, there will be charge to obtain your credit score.
By phone Call (877) 322-8228.
You may complete the form on the back of the Annual Credit Report Request brochure, and mail it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA, 30348-5281.
You’ll be able to order all three credit reports at one time, or at different times throughout the year. It’s your choice. But be sure to order from the centralized agency. If you go directly to the credit reporting agencies, you will be charged unless you fit another criteria for a free report.
The 2003 law did not eliminate the other reasons to receive a free credit report. You’re still entitled to a free credit report if you’ve been denied a loan, insurance policy or job based on your credit report; if you’re applying for unemployment or receive public assistance; and if you currently reside in a state that already offers an annual free credit report from each credit reporting agency (Colorado, Maine, Massachusetts, Maryland, New Jersey and Vermont. Georgia residents are entitled to two free annual credit reports from each credit reporting agency).
It is important to review all three reports annually. There could be a mistake in one report that is not reflected in the other two.
Who can Access my Credit Report?
The Fair Credit Reporting Act (FCRA) specifies who can access your credit report and why. The FCRA states that a company must have a legitimate reason to view your credit report. Any organization or individual who obtains a copy of your credit report under false pretenses can be fined and jailed for up to a year.
The types of organizations that can access credit reports and perform a credit history check are any organizations with a legitimate business need that want to check your credit history. These organizations include:
- Insurance companies
- Landlords seeking a credit check for renters
- Credit card companies
- Companies where you are seeking employment (only with your written consent)
- Organizations considering your application for a government license or benefit (if the agency is required to consider your financial status)
- State or local child support enforcement agencies
- Government agencies (usually can only look at your name, address, former addresses, and current and former employers)
- Other organizations you’ve initiated business with
Keep in mind that any time your credit report is viewed by one of the above organizations, a “hard inquiry” gets recorded on your credit report. (When you request your own credit report, it is considered a “soft inquiry.”) The more hard credit reporting inquiries that show up on your credit report, the worse your credit score.
Also keep in mind that potential employers see a different version of your credit report than lenders do when they do a credit history check. Potential employers conducting a credit check for employment are only concerned with how you manage and repay debt; in other words, your level of financial responsibility. Therefore they don’t need to see as many details on your credit report.
What is a Credit Score?
A credit score is a statistical summary of the information contained in your credit report. Its purpose is to summarize your credit worthiness in a simple 3 digit number which can be very quickly assessed by lenders. This number or ‘score’ will often influence whether or not you receive the credit you are applying for, and if you are offered a competitive interest rate. However, it is not the only factor in determining your ability to repay a loan, lenders will usually look at your entire credit report as well before making their decision.
Your credit score can vary depending on which credit bureau you are checking (Trans Union, Equifax or Experian) and on what kind of loan you are seeking. Your credit score for a mortgage might be different than your score for a car loan. Credit scores can range from 375 to 900 points, the higher your score the better. The average score is between 650 and 675, but generally anything above 700 is considered very good, whereas a score of 600 or below is usually perceived as low, and in need of improvement.
Many web sites offer generic credit scores, but you need to think about why you want your credit score. If you’re planning on making a major purchase, you probably want to check your FICO score and not just any credit score. If you really want to be sure that you are seeing the same information that your lender is judging you by, then ask the lender which score they are using and then purchase that exact score, or set of scores. For example, it’s typical for a mortgage lender to check all 3 FICO scores when evaluating you for a loan. However, some auto lenders may only use 1 FICO score to qualify you for an auto loan. The point is that it’s worth it for you to find out and make sure you’re seeing the credit score that your lender is using to evaluate you.