Time for a Credit Report Checkup

published 23 March 2006

Have you looked at your credit report lately? The information on this document can influence your ability to buy a home, take out a car loan, get a low rate on your credit card, secure insurance coverage or even land a job. It also can help you find out if you've been a victim of identity theft. With so much riding on your credit history, you simply can't afford not to know what it's saying about you.

Thankfully, it's easy to check your report. The government allows consumers to request a free credit report every 12 months from each of the three credit bureaus -- Equifax, Experian and TransUnion. You can request all three at once or spread out your requests over the 12-month period. The privilege was introduced across the country on a rolling basis and has been available to residents in the West, Midwest and Southern states now for more than one year -- which means if you live in those areas, it's time to pull your free report again.

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To verify your identity, the site will then ask you several questions based on information in your credit report. For example, you may be asked the name of your mortgage lender and the amount of your monthly payment, or who holds your car loan or student loans. These questions may seem straightforward, but they can be tricky. For example, I've been asked how much my mortgage payment is -- and I don't have a mortgage. And my husband was once asked which lender held his student loans -- he answered the lender that sends him all his statements, but apparently his loans were held and administered by different firms, so he missed the question. When you answer incorrectly, you're locked out of the online system, and you must get your report my mail.

Requesting your report by mail or phone can be simpler, though it can take up to 15 days to receive it. You fill out the mail request form with your name, address, social security number, birthday and previous address, and select the firms from which you wish to receive your report. The phone request system asks for the same information, which you simply speak into the phone and the system repeats your answers back to confirm it heard you correctly. You lose the instant gratification offered by the Web, but you won't face any probing or tricky questions beyond the basics when you take the old-fashioned route. And it may not take as long to receive your report as the system says. I recently received one of my reports within two days of my phone request.

Your 12-month freebie period begins from the time you pull your first report, not from the date the service was first offered in your area. You can pull your report from all three credit bureaus at once, but it's best to stagger your requests. That way, you can get a report every four months and monitor your credit history throughout the year. So, for example, you could pull your Experian report in March, your Equifax report in July, your TransUnion report in November, and then start over again with Experian next March -- and never pay a dime.

Personal information. This including your name, birth date, social security number and address. The section may even list past and present employers and your spouse's name. You want to make sure this is all accurate so that creditors don't confuse you as another person with a similar name or social security number. Credit bureaus have even been known to mistakenly list someone as deceased, which could really put a damper on your efforts to secure a new loan.
Credit accounts. This section lists your current and past accounts and your payment history. It includes your installment debt -- accounts on which you pay a fixed amount over a period of time, such as mortgages, auto loans and student loans. And it also includes your revolving debt -- open-ended credit such as credit cards or retail cards. For each account, you'll find detailed information, such as the date you opened it, the date you closed it (if applicable), your current balance and payment history. Make sure this is reported accurately and that all the accounts listed are indeed yours.Your report also will list tax liens, foreclosures, garnishments, court judgments, accounts turned over to collection, and if you filed for bankruptcy. These will kill your credit score and hurt your chances of qualifying for new credit and snagging the best interest rates. So if there's a mistake or evidence of identity theft, you'll want to get it fixed as soon as possible.
Requests for your credit history. This is where you can see who else has been looking at your report. Lenders will view your report when you apply for credit or open new accounts. If you see a strange request in this section -- say you live in California and a car dealership in Illinois requested your report -- that could be a red flag of identity theft. This section also helps you see if you've been applying for too much credit lately. A large number of inquiries in this section can lower your credit score. Inquiries stay on your report for two years. Learn more about what influences your score and how to increase your creditworthiness.

To correct an error, you need to tell the credit bureau and the information provider (such as a bank or creditor) in writing what is wrong. Include copies of documents to support your claims. Make sure your letter includes your complete name, address, date of birth and social security number. You should also include any previous name or address you used during the disputed period, the creditor's name and details of the account including the account number and when you opened it. (See a sample dispute letter.)

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