Watch this 4-minute video and learn how to check your free annual credit report, via official site annualcreditreport.com.
What is a Credit Report?
A credit report is a history of finances based on credit cards, loans, and other monetary values provided to you through creditors and lenders. This history is the basis for your ability to procure future loans or increases in credit card lines along with the interest rates for repayment of these loans.
The information on your credit report are the tools that are utilized by creditors and lenders to determine if you’ll pay back the loan or not. They will look at your payment history, your active accounts, and the balances of those accounts.
You can find your free credit reports from all three reporting bureaus online by logging onto annualcreditreport.com. Don’t forget to check your credit score, too!
How Does Information Get On My Credit Report?
There are three national credit reporting bureaus that compile your information. Equifax, Experian, and TransUnion receive your information from your credit card companies, banks, retailers, mortgage companies, and other lenders, based on the credit you’re granted along with other information like public records and collection agencies. With this information, they’ll list your accounts and all pertinent information in one location for you.
Some of your information may appear missing from one or two of your reports from these bureaus, but this isn’t necessarily worrisome since your creditors and lenders may not report to all three or any at all for that matter. With the accounts that are reported, you’ll want to ensure they are correct across the board or at least fairly close. Be sure to check each report from all three bureaus because of the differences between them.
How Often is My Credit Report Updated?
You’ll find it updates on a regular basis (daily, weekly, or monthly) as the three bureaus received new statuses of your accounts from your creditors and lenders. On time or late payments along with your new balance totals are typical report updates. By paying on time and paying at least your minimum payment, your creditors will send in that positive information, which can raise your credit score. On the other hand, your credit score will decrease if you make late payments or don’t pay at all. It’s better to pay on time and at least your minimum amount than to ignore it.
How Long Does Negative Information Stay on My Credit Report?
Luckily, this negative information only lasts for a certain time before it falls off. The timeframe varies, however, based on the type of negative information. You can expect seven years for late payments, judgments, tax liens. Longer durations of ten years exist for items like bankruptcies.
Unlike negative information, the positive information will typically stay on your credit report, leading to better impacts on your score. Other accounts that can stay on your report for years are those you’ve paid as agreed (up to ten years). Revolving credit like credit cards can stay on your report indefinitely, even paid off, as long as you still have an active account.
You’ll want to keep tabs on your credit report to ensure any negative information drops off once its timeframe has expired.
How Do I Ensure My Credit Report is Accurate?
Creditors make mistakes. They’re human after all. Inaccurate information can be placed on your account, such as late payments or new balances that aren’t yours, or you can find yourself a victim of fraud or theft of your identity. By having this inaccurate information, your credit score could suffer for it and effect your chances of receiving a loan from a lender.
You want the best terms and interests you can get. To do this, you’ll want to ensure your credit report is accurate and report any erroneous information to the credit bureau.
Other aspects you want to ensure are accurate are your personal and financial information. If you need a copy of your credit report from each of the three credit reporting bureaus, you can receive a free one each year through annualcreditreport.com.
Once you’ve accessed your credit report, you’ll want to examine if for any errors or any outdated information. This is a critical step when you’re cleaning up your credit report. You’ll want to make sure that the following is accurate:
- Personal information – your name and address,
- Complete list of your credit accounts,
- You know each account that’s listed,
- Correct payment history for each account,
- Account balances and age of accounts (this is based on the date you opened the account),
- Lack of activity on inactive accounts or closed accounts,
- Any hard inquiries are actually yours from the correct creditors or lenders,
- Outdated negative information has fallen off your report after its time has expired (this includes late payments, missed payments, bankruptcies, liens, and judgments).
Who is Allowed to See My Credit Report?
Based on the Fair Credit Reporting Act (FCRA), this governing body has laid out the groundwork on who can access your credit report under Section 604, also known as Permissible Purposes of Consumer Credit Reports.
With this groundwork, you’ll discover that any and every time you apply for credit or fill out an application for credit, you’re allowing that particular creditor access to your credit report so it can accept or deny your request based on the information on your report. When these creditors pull your credit, it’s known as a “hard” pull or inquiry that will present itself on your credit report. Car loans, mortgages, and credit cards are all forms where a credit will access your credit.
There are also “soft” pulls or inquiries that can happen without effecting your credit. These are typically completed when creditors and lenders take a peek at your credit report and extend you a preapproved amount of credit prior to an actual application being filled out by you.