If you have never seen a copy your credit report, you definitely should order a 3-in-1 credit report, which includes your credit report from Experian, Equifax, and TransUnion.
Why a 3-in-1 credit report?
The three national credit bureaus do not communicate with each other, so you actually have three credit histories. It is up to you to make sure that your credit histories are accurate, so you should get all three of your credit reports.
Mistakes DO Happen
Do you know who has had access to your credit report information? Do you know if the information they saw is accurate? According to a study by U.S. PIRG, 70 percent of the credit reports have errors of some kind and 29 percent contained serious errors like false delinquencies and judgements that don't belong to the consumer.
You are applying for a credit card
If you are considering applying for a car loan, bank loan, or credit card, you will want to see your credit report and make sure all information is accurate. Since each inquiry can count against your credit rating, make sure that your application isn't rejected based on mistakes in the credit report.
Co-Signed a Loan
If you have co-signed a loan for a family member or friend, their payment record will also appear on your credit report. Make sure you know how your credit is affected.
Before you start shopping for mortgage, take a look at your credit report before the mortgage companies do.
If you are going to be renting an apartment, especially in a competitive market, it is wise to have a recent copy of your credit report with you while apartment hunting. Most apartment owners or managers will want to check your credit report before offering you a lease.
Your credit may be combined with your spouse, and there may be certain transactions that you may not be aware of. If you get a divorce, notify the three major credit-reporting agencies that your status has changed to "single." Provide them with new addresses for both you and your ex-spouse. Specify that all accounts should henceforth be reported separately. Otherwise, transactions may be reported on the wrong spouse's account. The records could get tangled confused, especially if one of you were to remarry. Occasionally, one or both spouses may experience credit problems during the separation period preceding the final divorce, especially if marital assets are frozen during settlement negotiations. You will need a copy of your credit report to review with your attorney so that you can accurately evaluate how your divorce will affect you financially.
Someone may be committing fraud by using your identity and applying for credit in your name. Credit reporting companies do not have to inform you of suspect items, so it's up to you to be vigilant about your credit. You should regularly check your credit report to make sure that all new inquiries and accounts are not fraudulent. Make sure all information is accurate and if you suspect fraud, contact your credit reporting agency and ask that they put a fraud alert on your file.
If you have your own business, it is imperative that you regularly monitor your credit condition. The stronger your credit, the greater your ability to secure the financing you need to properly build and maintain your company.
If you use a financial advisor, it is recommended that you check your credit report at least once a year and review it with him/her so your financial condition can be accurately assessed.
What is in a credit report?
The following types of information are found in your credit report:
- Identifying information: Includes your name, nicknames, current and previous addresses, Social Security number, date of birth, and current and previous employers. This information comes from any credit application you have completed, and its accuracy depends on your filling out forms clearly, completely and consistently each time you apply for credit.
- Credit information: Includes specific information about each account including the date opened, credit limit or loan amount, balance, monthly payment and payment pattern during the past several years. The report also states whether anyone else besides you (i.e. a spouse or cosigner) is responsible for paying the account. This information comes from companies that do business with you.
- Public record information: Includes federal district bankruptcy records; state and county court records, tax liens and monetary judgments; and, in some states, overdue child support payments. This information comes from public records.
- Inquiries: includes the names of those who have obtained a copy of your credit report for any reason. This information comes from the credit reporting agency, and it remains available for as long as two years, as per federal law.
While there are a number of good reasons to order, review and master the details of your credit report, one primary truth cannot be avoided: Your credit report is your electronic fingerprint. You can't escape it. It will always precede you. It represents your reputation in the personal financial community. If it is solid, it can be one of your best assets. If it is damaged, it can be one of your biggest liabilities. The sad truth is that the majority of Americans have never seen their credit reports, though their credit profile affects practically every aspect of their financial lives. Even more disturbing is that of those who have seen their credit reports, a significant number dont understand what they are reading. Credit is not something to be feared, but rather a tool to build financial security. It is simply a different kind of investment portfolio. As more and more Americans put their funds into the stock and bond markets, it is not uncommon to see people hunched over the morning newspaper, watching one of the financial news networks, surfing the net checking out their portfolios or doing research, or pouring over their monthly investment statements. Unfortunately, few, if any, people realize that were they to dedicate just a fraction of the time they spend reviewing their investments to working on the development of a credit portfolio, they would dramatically enhance their ability to build the type of financial security they are striving for. Think of your credit report as the equivalent of an investment statement. But just as you cant know your entire financial picture without reviewing statements from all of your investment accounts, you will not see your entire credit picture unless you read a report from each of three (3) major credit reporting agencies (Experian, Trans Union and Equifax). Because just as Merrill Lynch doesnt share your account information with Etrade or Schwab, none of the three (3) national reporting agencies share information with each other. Therefore, simply seeing one, or two, credit reports may not give you the entire picture. There is, however, a way to see your entire credit profile as reported by all three (3) bureaus one (1) report. It is known as a 3-bureau, or triple-merged, credit report. And, since it reports each credit account you have and indicates which credit bureaus report which accounts, you can finally see who knows what about you.