The lazy days of summer are here, and now is a great time to get a copy of your credit report and go over it with a fine-toothed comb.
It will help you keep on top of your finances, let you know if you should refinance your debt at a lower interest rate and show you any incorrect information that may have crept onto your report. Credit reports contain a lot of valuable information, but people often don't know how to check it or aren't sure what to look for. Not sure where to begin? Here's what you need to know about checking your credit report.
1. Why do I need to see my credit report?
The idea of reading your credit report may seem daunting. There’s a lot of information, a lot of numbers, and it could be bad news. As daunting as it may seem there is also a lot to learn from your credit report.
By going over your credit report you could:
- find errors and correct them
- discover what you can do to increase your credit score
- understand what factors are affecting your credit score
2. Do I still need my credit report if I know my credit score?
The short answer is YES!
While it’s important to know your credit score, a single number doesn’t have as big of an effect on your finances as you might think. Financial institutions want to see your whole financial picture before deciding on a loan. Your credit score is a quick way to summarize your credit history, but it can also vary from agency to agency, often by significant margins.
If you want to improve your credit score, you need to see what’s on your report so you can take the necessary steps to improve it. In other words, just knowing your credit score is not all you need to get an accurate picture of your credit.
3. How do I get my credit report?
In a world of online scams, the best choice is the one recommended by the government’s Consumer Finance Protection Bureau (CFPB). You’re entitled to a free copy of your credit report every year, and AnnualCreditReport.com will give you a copy of your report from each of the three credit bureaus.
4. What should I look for in my credit report?
- The first thing to do is make sure every account is familiar to you
- Make sure the account status is accurate and up to date.Nothing is showing in default if you are making current payments.
- Remember to check balances as well. Just because the bureau is right that you have an account, it doesn’t mean they’re right in how much you owe.
5. Should I challenge everything on my credit report?
There are websites suggesting you challenge everything on your credit report, even if it’s a valid charge. Those websites are not trustworthy, and it is illegal to file a false complaint.
Challenge every mistake, though. If you’re not sure what a charge is, call to find out. Make sure you follow up with every mistake you challenge, too. You should not pay or be penalized for charges you didn’t incur.
6. How do I dispute an error on my credit report?
Contact the credit bureau that is showing the error and the company that claims you owe them money. Make sure to send copies of any supporting documents you have.
Be sure to follow up!
The company that corrects a mistake on your behalf is required to tell all of the reporting agencies, but they may not follow through promptly. Continue to watch your credit report until the information is updated and don’t be afraid to follow up as many times as needed – remember it’s your credit score.
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