To check your credit report, or not to check your credit report – that is the question. And for 59% of Americans, the answer is not to check your credit report, or at least not check it often, according to the results of a national survey of 1,000 people released in August.
The survey revealed that only about four in 10 (41%) of Americans actually check their credit report once a year or more often, which can be a mistake. Your credit report is a huge source of information on how to improve your credit score, as well as a great way to keep an eye out for signs of identity theft.
If you’re among the six in 10 people who aren’t checking your credit report regularly, here’s what you need to know:
What is a credit report?
A credit report is a detailed statement of your credit history. Reports are generated by and provided to lenders by one of the three major credit bureaus – Experian, TransUnion, and Equifax. Your report will contain information including:
- Identifying information
- Credit accounts
- Credit inquiries
- Public records and collections
Everything except for your identifying information is used to generate your credit score – a three-digit number to help lenders identify your creditworthiness based on where your score falls within a set range.
Why is a credit report important?
Your credit report is important because it’s used by lenders to make financial decisions about you. The information provided on your report is what determines your credit score. If you’ve ever opened a credit card, taken out a car loan, applied for an apartment to rent, and so on, then you’ve had someone check your credit score and run a credit report on you.
That’s why it’s so important that your credit report is up to date and accurate. If you aren’t checking your credit report at least once a year (which is free to do), then how do you know everything is correct, and you’re getting the most favorable terms?
Or, how do you know that someone hasn’t opened a couple of credit cards in your name and gone on a spending spree? Your credit report will show any and all accounts that are open in your name, as well as any companies that may have inquired about your credit report. If you see something you don’t recognize, you can dispute it (more on that later) or take steps to protect your identity.
You may think checking your credit report doesn’t matter if you already know you have bad credit or no credit history, but it’s still important. Understanding your relationship with credit and then taking proactive steps – such as using a credit card for bad credit responsibly – will help improve your score. For instance, if you look at your report and see you often miss deadlines, you can sign up for payment reminders or set a calendar alert.
How do I get a free credit report?
To request a copy, visit AnnualCreditReport.com – the only authorized website – or call 1-877-322-8228 and provide your identifying information, such as name, address, Social Security number, and birth date. You can request a free copy of your credit report once every 12 months from one or all three of the credit reporting bureaus. This means you can get one every few months or all three at once depending on how often you’d like to check it.
How do I dispute a credit report error?
If you find an error on your credit report, you can dispute it by contacting both the credit reporting company and the organization that provided the information (i.e., your loan lender). The Federal Trade Commission recommends that you submit a letter in writing with copies of your documents via certified mail.
Credit companies must investigate any disputes brought up to them and then inform you of the decision in writing. Additionally, information providers who continue to report disputed items must notify the credit reporting company about your dispute. Information that is found to be incorrect or incomplete must be updated or deleted from your report. If a dispute is not resolved, you can request that a statement of dispute be included in your file.
Your credit report is an important source of information to both you and potential lenders. That’s why it’s important to join the 41% of Americans who check it regularly to ensure that everything is accurate and complete.