When it comes to credit, there are two things you need to understand—your credit score and your credit report. Your credit score is the three digit number that gives lenders an idea of how “trustworthy” you are with credit. Your credit report, though, is just as important and can help you improve your credit score overall. Here’s what you need to know:
What is a credit report?
A credit report is just that—a report on your credit. Unlike your credit score which is just a quick snapshot, your credit report looks into your entire credit history and reports on your personal details and habits when it comes to paying your bills and handling credit.
How do you get a copy?
In the United States, there are three major credit reporting bureaus: Equifax, Experian, and TransUnion. You can request a copy from one or all of these bureaus online at annualcreditreport.com or by calling 1-877-322-8228. These are the only methods for requesting a free credit report that are authorized by the Federal Trade Commission. To verify your identity, you will need to provide your name, address, social security number, and birthdate.
How often can I get a copy?
The FTC allows you to request a free copy from each of the three bureaus once every 12 months. You can choose to get all three at one time or space them out by a few months.
What information is in a credit report?
The three bureaus may format their credit reports differently, but they’ll each contain the same information:
- Identity: Your name, address, social security number, birthdate, and employment information will be included; however, they are not used in credit scoring.
- Trade Lines: This section will detail all of your credit accounts—everything from student loans to car payments to a Target Red Card! You’ll be able to easily see how many accounts you have and with whom, the date they were opened, the current balance, the credit limit, as well as your payment history, including if you’ve ever missed a payment or was late making payment.
- Inquiries: You’ll also see how often an inquiry was made into your credit and by whom. For instance, whenever you try to open a new credit card, an inquiry is made into your credit history by the lender.
- Public Records & Collections: Lastly, you’ll see any information from credit reporting information regarding public record information, such as bankruptcies, foreclosures, etc., or records of overdue debt by collection agencies.
What should you look for?
Once you have your credit report, you’ll want to look closely at it and review every single line item. If there’s any sort of discrepancy, you’ll want to dispute those, so it doesn’t reflect poorly on your credit history or credit score. Follow the FTC’s guidelines for reporting and disputing a discrepancy.
Your credit report can provide you with a wealth of information to better understand your financial situation. If you’ve never requested one before, take a look and see what you find. For instance, if you notice you’re regularly late on making payments, set up a calendar notice so that you start making them on time. This will improve your credit score and empower you to start taking better control of your financial situation!