Life is short. Yet credit experts say you should devote some of your precious time to checking your credit reports for errors.
That’s because credit scores come from the data in credit reports. A mistake on your reports could lower your scores, getting between you and your financial goals. You don’t want someone else’s flub to raise the cost of your next car loan or complicate your mortgage application.
And you sure don’t want somebody else opening accounts in your name and making a mess of your credit standing. With data breaches regularly exposing sensitive personal financial information, it’s more important than ever to stay on top of your credit profile. Monitoring your credit reports is a key part of that.
How do I get my credit reports?
Federal law says you can request a free report from each major credit bureau — Equifax, Experian and TransUnion — every 12 months using AnnualCreditReport.com. You need all three to get a complete picture, because some creditors send data to only one or two bureaus.
Your reports show details about your credit accounts, including:
- Account numbers
- Payment records
- Collections accounts
- Public records, such as bankruptcies or tax liens
They also include the names of organizations that have accessed your report and personal data, including your:
- Name, and variations you’ve used on credit applications
- Social Security number
- Date of birth
- Addresses, phone numbers
Most mistakes result from human error, such as mixing up people’s accounts because they have the same or similar names, transposing numbers, or applying payments to the wrong accounts.
What should I check on my credit reports?
Accounts: Make sure you’ve opened all the accounts listed. If you’re not sure, use the contact information to verify the account. Check that the payment history seems correct.
Negative information: Pay close attention to any negative marks, such as late payments or collections — those can tank your credit scores.
If the information is wrong, you can ask to have it removed using the credit bureau’s dispute process. Even if the negative information is true, all is not lost. Piling up positive information, such as on-time payments, will help dilute the harm to your scores over time. And most negatives fall off reports after around seven years. If yours haven’t, you might be able to have them removed.
Personal information: An address where you’ve never lived combined with an account you don’t recognize is a sign of identity theft. Thieves might have swiped your personal information and used it to open accounts in your name but diverted the card to a different address.
What if I find an error?
If you fear identity theft, take these steps recommended by the Federal Trade Commission. Act quickly to limit the damage.
You can dispute erroneous information and negative marks that are too old to be reported with the credit bureau reporting them. Each bureau has an online dispute form, or you can send a letter:
Equifax, P.O. Box 740256, Atlanta, GA 30348
Experian, P.O. Box 4500, Allen, TX 75013
TransUnion, P.O. Box 2000, Chester, PA 19016
Any bureau you contact has 30 days to investigate and respond to your dispute.
What comes next?
The data breaches that regularly make the news prove that keeping your credit safe is your responsibility.
- Don’t rely only on a once-a-year check of your reports. Sign up for a free credit score; look for a source that also includes credit report information and offers alerts about new account openings and other changes, such as NerdWallet.
- Consider using credit freezes to limit access to your credit reports. That’s the strongest barrier to someone opening new accounts in your name. Placing freezes and temporarily lifting them when you want to apply for credit is free.
- Watch existing accounts for charges you didn’t make. Always check your statements, and consider signing up for alerts about charges above a set amount.
More on your credit reports