Your credit history is very important. A good credit report can help or hurt you when you look for a car loan, a mortgage or some insurance policies. You may be denied loans or credit cards if you history is poor, or you may end up paying higher rates on credit cards or for insurance coverage. (See: Credit-Based Insurance Scores: How an Insurance Company Can Use Your Credit to Determine Your Premium) Some employers may even look at your credit rating as a factor in whether or not to hire you.
You should monitor your credit rating yearly, learn more about what helps and hurts you, and review reports to be sure there isn’t anything inaccurate. Some reasons you should monitor your credit annually:
- Find problems that are hurting your good rating and try to improve
- Identify mistakes and get them corrected
- Watch for signs of potential identity theft
- Somebody else’s information might be mistakenly attributed to you
- You might find accounts that are not yours
By law, you can get one free copy of your credit report every year. That includes one copy from each of the three major reporting companies: TransUnion, Equifax and Experian. But you need to be careful about where you get your free credit reports from. Here is the authorized source:
Annual Credit Report at 1-877-322-8228
You will hear a lot of promotions for “free credit reports” – but consumer beware! Many of them make reports free but have some type of a catch – see this short video to learn more.
What if you find problems in your credit report?
According to consumer.gov, you can take these steps to fix any mistakes or problems:
Write a letter. Tell the credit reporting company that you have questions about information in your report.
- Explain which information is wrong and why you think so.
- Say that you want the information corrected or removed from your report.
- Send a copy of your credit report with the wrong information circled.
- Send copies of other papers that help you explain your opinion.
- Send this information Certified Mail. Ask the post office for a return receipt. The receipt is proof that the credit reporting company got your letter.
- The credit reporting company must look into your complaint and answer you in writing.
The FTC offers more information: