Credit fraud is a growing concern for people of all ages, as credit report errors can have a negative impact on everything from renting an apartment to purchasing a new car or even affording insurance.
A credit report provides a record of your financial activity, including loan payment history and credit usage. Credit reports are the basis for credit scores, which have a wide-ranging impact in our lives.
Employers often consider credit scores when making hiring decisions. Lenders use credit scores when setting rates and granting loan requests. Insurance and utility companies check credit scores before offering potential customers their services, and most apartment managers screen rental applicants based on their credit scores.
Checking your credit report for accuracy can help ensure your credit score isn’t being artificially deflated by errors or out-of-date information. It won’t lower your credit rating, and it can even alert you to potential fraud and identity theft.
For these reasons, the Consumer Financial Protection Bureau recommends checking your credit report at least once a year. You should also check your reports prior to making important financial decisions like applying for a new job or making a major purchase that involves a loan, such as buying a house or car.
How do I request my credit report?
Equifax, Experian and TransUnion are the three primary credit bureaus that collect data from financial companies to create your credit report. These companies, usually banks and credit card companies, are called “furnishers.”
Every year, you have the right to request one free credit report from each bureau. For most people, each report will have somewhat different information. You can order all three reports at once to compare them, or you can check them individually at different points throughout the year. You may even be able to review your credit report more frequently online, at no extra cost, and by law, a credit reporting company can charge no more than $14.50 for a credit report, according to the CFPB. Visit AnnualCreditReport.com to request your free credit report.
There are other third-party companies that can provide access to your credit reports.
Some potential benefits of these products include regular updates on reported credit activity, identity theft protection and easier access to your credit scores. However, these services are not always free. It’s important to be mindful of hidden fees or subscription costs when considering a credit report monitoring service.
What are the most common errors, and how do I report them?
When you receive your credit report, look for information that appears inaccurate or outdated.
Identity errors. Always check your personal information (name, date of birth, address) for mistakes. Make sure you haven’t received a “mixed file” — a report that includes accounts belonging to someone else with a similar name to yours.
Account status errors. These might include incorrect dates, duplicate debts or accounts falsely reported as delinquent. Make sure any closed accounts aren’t still reported as open. If you’re an authorized user on someone else’s account, verify that you aren’t listed as the account owner.
Data management errors. Simple but serious numerical problems like incorrect account balances or credit limits.
If you do spot legitimate errors, your credit report will always include detailed instructions for resolving them. You may need to dispute the errors with both the credit bureau and the furnishers who provided that incorrect information. For template letters and advice on filing a dispute, check out the CFPB’s website.
After you file your dispute, the credit bureau will investigate before coordinating with furnishers to correct any errors. The furnishers will then notify all credit reporting companies of the corrections, allowing them to update your reports.
How can checking my credit report alert me to financial fraud and identity theft?
While reviewing your credit report, you may notice evidence of fraudulent activity. According to the CFPB, this may look like “accounts you didn’t open, wrong amounts on your accounts” or inquiries about your credit score “from companies you’ve never contacted.”
If you suspect fraud, it’s important to first contact your credit card company and bank to place holds on your accounts. Then reach out to the Federal Trade Commission at IdentityTheft.gov. They can walk you through the process of securing your identity and — if you haven’t already — contacting one of the primary credit bureaus to place fraud alerts and a credit freeze on your accounts.
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