If you are applying for a loan or credit, records of your previous dealings with someone else’s money are vital.
Whether you get that mortgage or credit card, or not, may depend on a network of credit reporting agencies that either share information with, or are owned by, three major credit bureaus. This report is often a critical factor in credit scoring systems that lenders use to issue credit cards as well as mortgages or other loans.
So, if you’re considering making a major financial move it’s a good idea to check your credit report to know where you stand. That way you can be aware of, and if necessary take care of, problems before they jump up and derail your plans.
If you find problems, or if potential creditors discover them, take steps to rebuild damaged credit and clean up that record.
If you’ve made mistakes in paying previous loans, bounced checks, made late payments or had other problems, you may still be able to reduce the amount of damage they will do to your credit with explanations or some basic repair.
Getting your hands on your credit report
The reports will not automatically be sent out. Each consumer must request their reports one of these three ways. Go to www.annualcreditreport.com, which is the only authorized source for consumers to access their annual credit report online for free. Or, call 877-322-8228. Lastly, 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. One more caveat: 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 new ruling doesn’t replace the other ways to receive a free credit report. First, if you applied for a loan and were turned down, you can request a copy by writing the correct credit bureau within 30 days of the rejection. With your request, you should include a copy of the declined loan application.
Secondly, you can also get a free report if you are unemployed, planning to apply for jobs in the next 60 days, receiving public welfare assistance or believe the credit file contains mistakes resulting from fraud.
Lastly, if you currently reside in a state that already offers a free annual 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.
To buy your credit reports, request a copy from each of the three credit bureaus: Equifax, Experian and TransUnion. Checking your credit can cost you as much as $9.95 per report, although it differs from state to state. You can order by phone, at the agencies’ Web sites or in writing. If you write, your letter needs to include your full name, date of birth, current and former address, Social Security number, your spouse’s name and your phone number. Each person requesting the report should sign the request.
Time it, then check the details
Once you get the report, you should make sure the following information is correct:
Any error that you find must be investigated by the credit bureau with the creditor who supplied the data. The bureau will remove from your credit report any errors a creditor admits are there. If you disagree with the findings, you can file a short statement in your record giving your side of the story. Future reports to creditors must include this statement or a summary of it.
The Fair Credit Billing Act requires creditors to correct errors promptly and without damage to your credit rating. The law defines a billing error as any charge:
Billing errors also include:
Once you have written about a possible error, a creditor must not give out information to other creditors or credit bureaus that would hurt your credit reputation until the matter is resolved. And, until your complaint is answered, the creditor also may not take any action to collect the disputed amount.
The law is on your side
You may also sue any credit-reporting agency or creditor for breaking the rules about who may see your credit records or for not correcting errors in your file.
A person who obtains a credit report without proper authorization — or an employee of a credit reporting agency who gives a credit report to unauthorized persons — may be fined up to $5,000 or imprisoned for one year, or both.
But a lot of people can see that report – including everyone to whom you have applied for a loan or credit. So be careful when applying for credit. You can even request that the credit bureaus remove your personal information from marketing lists.
When the companies you apply to check your report they can find out who else has been checking your report and determine what, when and how you have been applying for credit. That means if you have been getting turned down and are desperately applying for credit all over town your potential creditors will know.
|— Updated: Sept. 2, 2005|
Why you can trust Bankrate
Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We've maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next.
Bankrate follows a strict editorial policy, so you can trust that we're putting your interests first. All of our content is authored by highly qualified professionals and reviewed by subject matter experts, who ensure everything we publish is objective, accurate and worthy of your trust.
It's why over 100 million people — not to mention top publications such as The New York Times, Wall Street Journal and CNBC — depend on Bankrate as a trusted source of financial information every year.
Bankrate follows a strict editorial policy, so you can trust that we’re putting your interests first. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions.
We value your trust. Our mission is to provide readers with accurate and unbiased information, and we have editorial standards in place to ensure that happens. Our editors and reporters thoroughly fact-check editorial content to ensure the information you’re reading is accurate. We maintain a firewall between our advertisers and our editorial team. Our editorial team does not receive direct compensation from our advertisers.
Bankrate’s editorial team writes on behalf of YOU – the reader. Our goal is to give you the best advice to help you make smart personal finance decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. So, whether you’re reading an article or a review, you can trust that you’re getting credible and dependable information.
How We Make Money
You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey.
Bankrate follows a strict editorial policy, so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers.
We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money.
Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service.
This content is powered by HomeInsurance.com, a licensed insurance producer (NPN: 8781838) and a corporate affiliate of Bankrate.com. HomeInsurance.com LLC services are only available in states were it is licensed and insurance coverage through HomeInsurance.com may not be available in all states. All insurance products are governed by the terms in the applicable insurance policy, and all related decisions (such as approval for coverage, premiums, commissions and fees) and policy obligations are the sole responsibility of the underwriting insurer. The information on this site does not modify any insurance policy terms in any way.