How often should I review my credit report?
Some financial advisors and consumer advocates suggest you review your credit report periodically, because the information it contains affects whether you can get a loan — and how much you will have to pay to borrow money. You should make sure the information is accurate, complete, and up-to-date before you apply for a loan for a major purchase like a house or car, buy insurance, or apply for a job.
Reviewing your credit report will also help to guard against identity theft. That’s when a dishonest person obtains and uses your personal identifying information (such as name, address, and Social Security number) to open a new credit account in your name. Then, when that person doesn’t pay the bills, the delinquent account is reported on your credit report. Inaccurate information like that could affect your ability to get credit, insurance, or even a job.
What is a credit report?
A credit report is a record of your credit history that includes information about your identity, existing credit, public records, and inquiries about you. Your name, address, full or partial Social Security number, date of birth, and possibly employment information, are commonly reflected on the report. Current and fully paid or closed credit obligations will be listed, such as credit card accounts, mortgages, car loans, and student loans. It may also include the terms of your credit, how much you owe your creditors, and your history of making payments.
Public records include any court judgments against you, any tax liens against your property, or whether you have filed for bankruptcy. A list of companies or persons who recently requested a copy of your report will also be reflected on the report.
Why is a credit report important?
Your credit report is important because lenders, insurers, employers, and others may obtain a copy from credit reporting agencies to assess how you manage financial responsibilities.
Lenders may use your credit report information to decide whether you can get a loan and the terms you get for a loan (for example, the interest rate they will charge you). Insurance companies may use the information to decide whether you can get coverage and to set the rates you will pay. Employers may use your credit report, if you give them permission to do so, to decide whether to hire you. Telephone and utility companies may use information in your credit report to decide whether to provide services to you. Landlords may use the information to determine whether to rent an apartment to you.
Who collects and reports credit information about me?
There are three major credit reporting agencies - Equifax, Experian, and TransUnion - that gather and maintain the information about you that is included in your credit report. The credit reporting agencies then provide this information in the form of a credit report to companies or persons that request it, such as lenders from whom you are seeking credit.
Where do credit reporting agencies get their information?
Credit reporting agencies get information from your creditors, such as a financial institution, credit card issuer, or automobile finance company. They also get information about you from public records, such as property or court records. Each credit reporting agency gets its information from different sources, so the information in one credit reporting agency’s file may not be the same as the information in another credit reporting agency’s file.
Who else is allowed to see my credit report?
Because credit reports contain sensitive personal information, access to them is limited. Credit reporting agencies can provide credit reports only to: lenders from whom you are seeking credit; lenders that have granted you credit; telephone, cell phone, and utility companies that may provide services to you; your employer or prospective employer, but only if you agree; insurance companies that have issued or may issue an insurance policy for you; government agencies reviewing your financial status for government benefits; and anyone else with a legitimate business need for the information, such as a potential landlord or a financial institution at which you are opening a checking account.
Credit reporting agencies also furnish reports if required by court orders or federal grand jury subpoenas. Upon your written request, they will also issue your report to a third party.
How long does negative information stay on my credit report?
Generally, negative credit information stays on your credit report for seven years. If you have filed for personal bankruptcy, that fact stays on your report for ten years. Information about a lawsuit or an unpaid judgment against you can be reported for seven years or until the statute of limitations runs out, whichever is longer. Information about criminal convictions may stay on your credit report indefinitely.
What can I do if I am denied credit, insurance, or employment because of something in my credit report?
If you are denied credit, insurance, or employment - or some other adverse action is taken against you, such as lowering your credit limit on credit card account - because of information in your credit report, the user of that report must notify you and provide you with the name, address, and phone number of the credit reporting agency that provided the credit report used to make the decision. You can get a free credit report from this credit reporting agency if you request it within 60 days after receiving the notice. This free report is in addition to your annual free report.
If you receive one of these notices, it's a good idea to get your free credit report and review the information in it right away. If you think your credit report contains inaccurate or incomplete information, follow the steps in Credit Report Errors, to try to resolve the issue.
What can I do if I receive less favorable credit terms because of something in my credit report?
Lenders may use a credit report to set the terms of credit they offer you. If a lender offers you terms less favorable (for example, a higher interest rate) than the terms offered to consumers with better credit histories based on the information in your credit report, the lender must give you a notice with information about the credit reporting agency that provided the credit report used to make the decision. Again, you can get a free credit report (in addition to your annual free report) from this credit reporting agency if you request it within 60 days after receiving the notice.
For tips on how to improve your chances of receiving credit on better terms, read the Federal Reserve Board’s 5 Tips for Improving Your Credit Score.
How can I opt-out of receiving unsolicited credit offers?
Credit reporting agencies may sell the names and addresses of consumers who meet specific credit criteria to creditors or insurers, who must then offer them credit or insurance. For example, a creditor could request from a credit reporting agency the names and addresses of consumers who have a credit score of 680 or higher and then offer credit to those consumers.
You can have your name and address removed from these lists by opting-out of the listing. This will reduce the number of unsolicited offers you receive. To opt-out, call 888-5-OPTOUT (888-567-8688) or visit www.optoutprescreen.com. You will need to provide certain information in order to opt-out, such as your name, address, Social Security number and date of birth.
You have the ability to opt-out of receiving offers either for five years or permanently. If you want to opt-out permanently, you will need to fill-out, sign, and mail-in a form. The form is available by either calling the toll-free number or visiting the website.
You can reverse your opt-out decision at any time to start receiving offers of credit and insurance again by calling the toll-free phone number or visiting the website.
