Most people are at least peripherally aware that agencies track their financial history and that it impacts their future investing moves.
You may not know that your financial history is recorded in a credit report, which determines your credit scores.
Such an important document should be regularly monitored and checked for accuracy. Luckily, there are now several ways to get your free credit report.
Read on to learn more about the importance of credit reports and how to get one for free.
What is a Credit Report?
Every individual has a record of their payment history of debts and responsibility with bills (including utilities). A credit report is a record of an individual’s credit history.
There are three national credit bureaus (also called credit reporting agencies) in the United States: Equifax, Experian, and TransUnion. These agencies collect data from banks, credit card companies, the government, and other sources to track your history with handling liabilities.
It’s important to know that each agency manages its own records and may not have information about all your accounts. This is because lenders and other entities that report to the credit bureaus may not report to all three. Thus, there may be differences in your credit report depending on the bureau from which the report came. That is also why there may be differences in your credit scores.
Although there may be differences in your credit reports, no agency is more important than the others. It’s also essential to ensure that each agency has accurate information on you. Otherwise, inconsistencies may negatively impact your credit reports and scores.
While each agency may not have records of all your accounts, they all track similar information, including:
- Personal information – this includes your social security number, date of birth, full name, and other identifying information
- Credit accounts
- Credit inquiries – hard (occurs when you apply for a new line of credit and impact your credit score) and soft (when you or someone you authorize checks your credit report and do not affect your credit score)
- Bankruptcies or collections
- Public records
How are Credit Reports Used?
Your credit report helps potential creditors decide if they should extend your credit. Your credit report also helps determine what interest rate a lender will charge you and the credit limits they will offer.
Insurers, employers, and landlords may also check your credit report as part of their process. Your history of liability repayment can be a significant determinant of which products and services are available to you and at what cost (interest rates).
Credit Report vs. Credit Score
While your credit reports contain your credit history and current credit activity, your credit scores are numbers based on the information in your credit report.
A credit score is a three-digit number ranging from 300 to 850. These numbers represent a calculation based on your credit report. In essence, your credit score is your credit history distilled into a number that represents your creditworthiness.
The higher your credit score, the less risk you represent to the lender because you have a solid history of handling credit responsibly.
Why Should You Check Your Credit Report?
The information in your credit report determines your credit score, which helps lenders decide whether to extend credit to you and at what rate. Landlords and others may also run a credit check before doing business with you.
With access to new credit and even housing or employment on the line, it’s vital to ensure that your credit report is accurate. Moreover, identity theft and fraud are always possible. Regularly check your credit report helps ensure that no one opens fraudulent accounts in your name.
The sooner you find inaccuracies, the sooner you can take steps to correct errors on your credit reports.
Where Can I Get a Free Credit Report?
Annual Free Credit Report
Federal law requires that individuals have access to their credit information. The Fair Credit Reporting Act states that you are entitled to a free credit report from all three credit bureaus each year. You can request all three free copies at once or from whichever bureau you want.
The simplest way to request copies of your credit reports is to go to annualcreditreport.com, the official site. You can also order your free credit report by phone or mail.
During the pandemic, the three credit bureaus have been offering free weekly online credit reports, which you can access at this website.
By Phone: 1-877-322-8228; for TTY, call 711 and ask the operator for 1-800-821-7232
By Mail: Fill out the Annual Credit Report Request Form and mail it to:
Annual Credit Report Request Service
PO Box 105281
Atlanta, GA 30348-5281
Some financial services also offer access to your credit scores and credit reports. While many require a subscription, you can access free credit monitoring with Credit Karma.
Credit Karma partners with TransUnion and Equifax, so you can see your reports and scores with a free account.
Free Credit Report FAQ
Does Checking My Credit Report Hurt My Credit Score?
No, checking your credit report does not hurt your credit score because it is considered a soft inquiry.
How Many Credit Reports are There?
Everyone has three different credit reports, each prepared by one of the three major credit bureaus: TransUnion, Equifax, and Experian.
Why Are There Differences Between My Free Credit Reports?
Each of the three major credit bureaus collects information independently of the others. Lenders and other organizations that report information to the credit bureaus may send information to only one, two, or all three bureaus. As a result, information about your accounts may vary slightly from bureau to bureau and report to report.
What is the Best Way to Get a Free Credit Report?
The best way to get your free credit report is to go to the official website, annualcreditreport.com, and request your free credit report from whichever bureau you want. You are entitled to free credit reports annually from all three credit bureaus.
Can I Get More Than One Credit Report a Year?
Yes, you can get additional free credit reports if you meet any of the following criteria:
- You believe your file is inaccurate due to fraud
- You receive public welfare assistance
- You request a credit report from a nationwide credit reporting company while placing an initial fraud alert.
- You are unemployed and intend to apply for a job within 60 days of your request.
- Your state laws provide for a free credit report.
- Based on a credit report, you were denied credit, insurance, employment, or another adverse action. In this case, you are entitled to a free report from the bureau identified in the notice, but you must request it within 60 days.
What if There are Errors on My Free Credit Report?
If you notice errors or fraudulent activity on your credit reports, you must take immediate steps to dispute and correct the errors. A significant error in your credit report can lower your credit score and adversely impact your ability to obtain new credit at the best rates.
To dispute errors on your credit reports, gather all relevant documents and contact the credit bureau that issued the report with the error. Also, contact the lender or agency that provided the inaccurate information if the error is due to their misreporting.
Allow the bureau 30-40 days for an investigation and proceed based on the findings.