How to View and Read Your Annual Credit Report

Credit ReportLenders and financial advisors are always telling you that the first step in making smart financial decisions is to know your credit score. This number, which ranges from 300 to 850, is what lenders look at to decide if they want to give you money and, if they do, how much interest they want to charge.

In order to make this information more open to the public, the government began a program that allows you to get a free annual credit report from one of three qualified providers (Experian, TransUnion, or Equifax). Each of these companies uses a similar algorithm that looks at your payment history, outstanding debts, length of credit history, new credit accounts, and types of credit used to determine your number.

While these companies are legally obligated to provide you with a free copy of your report, you may have to pay to access the actual credit score. That’s why being able to read the annual credit report can save you a little money—you might not see the number that lenders see, but you can look at your credit history and dispute any errors you might find.

How to Access Your Free Annual Credit Report

There are three ways to get your annual credit report. The easiest way is to visit www.annualcreditreport.com, which is the only authorized provider of credit reports in the United States. If you don’t want to fill the information out online, you can also call them toll free at (877) 322-8228 or fill out the included form on the back of the Annual Credit Report Request brochure.

The three providers rarely offer identical credit reports, so you may want to access more than one at a time. You can also wait and do one every few months—remember, you only get one free copy from each provider every 12 months.

How to Read Your Annual Credit Report

Credit reports can be difficult to read since there is so much information contained inside. Here’s an overview of what you can expect (though each of the three companies lists it differently).

  • Personal Information: This is the basic information about you—your name, date of birth, current address, past addresses, and basic employment information. Take a moment to review this to make sure it is all correct and up to date.
  • Public Records: This information might include any bankruptcies, court judgments, or wage issues (like child support or student loans that are automatically deducted from your paycheck).
  • Potentially Negative Items: This is where issues are flagged for immediate attention. Collections, repossessions, regularly late payments—anything that a lender might want to know about before giving you money is highlighted here.
  • Accounts in Good Standing: Your past accounts for up to seven years are included here—both the ones you are still paying and ones you may have closed. These usually indicate if the loan has been paid off or transferred, as well as whether or not you paid on time.
  • Credit Requests: This is a list of organizations that have run a credit check on you, either because you applied for a loan or credit card, or because they were a potential employer or rental agency. Too many inquiries of this sort can look bad.
  • Personal Statement: This is where you get to defend yourself. If you had trouble with identity theft in the past, or if you are in the middle of litigation over a financial issue, you can state it here so that lenders know of your situation and that you are working to resolve it.

If you find an error on your report, you are legally allowed to put in an inquiry that can then be looked in to and resolved. If you are viewing your annual credit report online, there are links you can follow to dispute the claim. If you accessed your report via phone or mail, you will need to make a physical inquiry following the steps provided.

Credit reports can be a little intimidating at first, since there is a lot of information to wade through—and it’s not always easy to read. Be sure and print out a copy of your report once you get it, and take it to a trusted financial advisor for additional help determining if there is something wrong and what you can do to resolve the issue.

 

Question for the comments below:  Who has a story about checking their credit report and finding something they didn’t expect???

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