The Federal Trade Commission estimates that one in every 20 consumers has errors in his or her credit report. That’s an alarming estimate, given the fact that credit information can affect the rates you are able to obtain when applying for a mortgage, credit card or any other consumer loan. The quality of your credit can affect how much you pay for your insurance coverage. It also can affect your ability to land that job or promotion; it’s estimated that nearly half of all employers use credit information in the hiring process. Do you have any errors in your report? The good news is that it’s easy to find out. You can go to annualcreditreport.com and find out within minutes.
Each of the nationwide credit reporting companies — Equifax, Experian, and TransUnion — is obligated under federal law to furnish you with a free copy of your credit report once every 12 months. To order, visit annualcreditreport.com, or call 1-877-322-8228. You may order reports from each of the three credit reporting companies on the same day if you wish.
Once you have your credit report in hand, check to see that it contains only items that pertain to you. Be on the lookout for addresses, employers or other identifying information that does not apply to you. Watch for any incorrect information about your credit card or loan accounts, even those you no longer have open. Any errors should be reported to the credit-reporting agency that furnished the report. In some cases, an error or errors will be on reports issued by all three agencies; in other cases errors are unique to an individual credit reporting agency’s report. If you have an issue with your credit report, you can contact the credit bureau or bureaus on your own or submit a complaint via the Consumer Financial Protection Bureau online at this link.
Because there’s so much focus on credit scores — think of your score as a three-digit summary of your credit record — many people don’t check their actual credit reports for years. But it’s important to do so because your credit score is calculated using the information in your credit report. Make sure you’re checking your credit report each year, or ideally, every six months.
You also have the ability to limit access to your credit report. The first is by opting out of receiving prescreened offers of credit and insurance. You can opt out for five years or permanently. Call toll-free 1-888-5-OPT-OUT (1-888-567-8688) or visit www.optoutprescreen.com. There’s also the option of ‘freezing’ your credit report. This allows you to restrict access to your credit information and makes it more difficult for identity thieves to open new accounts in your name. For more information about credit ‘freezes,’ go to this link.