Let’s talk about your credit report… Have you had time lately to review your credit report? We’re all busy women, but it is important to maintain your finances and make sure that the information being collected about you is accurate and up-to-date.
Did you know that banks and credit unions (or anyone that offers you a line of credit or a loan) decides your credit worthiness by looking at your credit report? Yes ma’am, they do! Of course, it’s not the only thing they look at, but it does help them in the decision process. Think of your credit report as the resume for your finances (and you want that baby to sparkle like a diamond).
Here’s the good news: according to the FACT (Fair and Accurate Credit Transactions) Act, you’re entitled to a free copy of your credit report from each credit bureau once a year.There are three main credit bureaus in the U.S. - Experian, Equifax and TransUnion. The credit bureaus collect information provided by all of your creditors, which makes up your credit report.
The simplest way access your free credit report is to visit www.annualcreditreport.com. They are the only authorized source to obtain a report from all three credit bureaus online, in one place. (At this point you can pay a small fee to obtain your credit score with the report, if you want. But the actual credit report is free.) You can view or print your report immediately, or you can order the report by calling 877-322-8228 and it will be mailed to you. Be aware that the report can only be viewed through the website for 30 days, and you must wait another year (to the day) before you can request the report from the same credit bureau again. So, the plan is to order your credit report from one credit bureau now and wait a few months, and order the report again from another credit bureau. By doing this you’re reviewing your credit report every few months.
Reviewing your credit report often is financially smart for many reasons. One important reason is because of identity theft. I don’t have to tell you this – you hear about it in the news and have probably heard horror stories from your friends who have been affected. So, it’s smart to look at your report andmake sure your name (personal information) hasn’t been used to obtain loans or lines of credit without your knowledge. (If so, fraud alerts need to be placed on your reports and law enforcement needs to be notified.)
When reviewing your credit report, check for inaccuracies. For example, make sure your payment history is reported correctly, because anything reported late will negatively affect your score. Any unfamiliar or inaccurate information should be disputed with the bureau(s) reporting it; they are required to investigate and supply a response in a timely manner. Check for accounts that have already been paid off or closed; make sure the information reported isn’t incorrect because that can affect your debt-to-income ratio.
Each credit bureau’s report looks different, but is comprised of the same information. All three reports can be broken down into four sections: personal information, credit history, public records and inquiries.
- Personal information will include your name, social security number, current and past addresses, current and past employers, telephone number and date of birth.
- Credit history will list all credit accounts you’ve had in the last 10 years and how they’ve been managed. Each entry in this section includes:
Dates when the account was opened, updated, or closed
Timeliness of payments
Late payments (noted as a negative activity)
- Public records are nothing more than legal paperwork. Such as liens, bankruptcies and/or court judgments (including child support judgments) associated with you.
- Inquiries. Any person who has requested a copy of your credit report will show up in this section. Make sure you recognize who is looking at your report, it could be someone you already have a business relationship with or someone you have applied for a loan with. There are two kinds of inquiries: soft inquiries and hard inquiries. Soft inquiries generally stem from services you seek, like auto/home insurance quotes, or a creditor you already have a relationship with will glance at your report to see how you are paying any other creditors. Basically someone who is reviewing your credit report to see how you manage your credit. Hard inquiries will come from anyone you apply for a loan with (bank, credit union, auto dealership, etc). And too many hard inquiries in a short timeframe can negatively affect your credit score.
Remember, having a good credit score can literally save you thousands of dollars by enabling you to get the loan you want at the best possible rate. So, show your worth by keeping your credit score and credit report bright and shiny by taking the time to review it and take the appropriate action to correct any inaccurate information.