Welcome to Day 11 of the 30-Day Financial Wellness Challenge.
Each day will comprise of financial exercises, some short and others a bit longer, to help you become financially fit. The goal is to tackle different aspects of personal finances one day at a time.
After the 30 days, you’ll have a stronger understanding of your financial health and an action plan to improve your financial wellbeing. Review Day 10: Your Earning Statement
On day 11, we’re going to do a credit report review. After this challenge, you’ll learn:
- where to request your truly free credit report,
- elements that make up your credit,
- and where to dispute inaccurate information.
Your credit report is one of those financial records that follow you for the rest of your life. There’s a lot of information out there and it can get quite confusing.
In one of the daily challenges, your assignment was to get your free score. Although the free score apps are great tools, they lack details that can only be found by reviewing your actual credit report.
Let’s get started.
What is a credit report?
A credit report contains personal information such as your name, address, list of employers, credit inquiries, history and the status of your credit accounts. Account information includes your payment history, number of credit accounts, credit limits, and credit used, and any collection accounts or judgments and liens.
This information is collected by three major credit bureaus.
Major Credit Bureaus
Credit bureaus are organizations that track and report your credit, including your history of paying bills and may calculate your ability to repay future loans. Credit bureaus are not government agencies and are private corporations that offer two services:
- compile credit histories on prospective borrowers.
- and provide credit reports to lenders.
Can you request a free credit report from these bureaus? It depends. The credit bureaus allow you to request your credit report for free based on certain conditions. For example, if you’re denied for credit by a lender who used information found on your credit report in their decision making.
In other situations, you can purchase a copy of your credit report or you can use your federally mandated rights to request a copy of your credit report for FREE once every 12 months. But, you’ll have to use a specific website to do so.
The Fair Credit Reporting Act (FCRA) requires each of the nationwide credit reporting companies — Equifax, Experian, and TransUnion — to provide you with a free copy of your credit report, at your request, once every 12 months.
The website is AnnualCreditReport.com.
Again, there is only one federally mandated website where you can access all 3 credit bureau reports for free. You do not need to individually contact the three credit bureaus directly.
How to request your free credit report
To comply with the FCRA, the three nationwide credit bureaus have set up one website, a toll-free telephone number, and mailing address through which you can order your free annual report. To order your free copy of your credit reports:
- Visit AnnualCreditReport.com,
- call 1-877-322-8228,
- or complete an Annual Credit Report Request Form and mail it to:
Annual Credit Report Request Service
P.O. Box 105281
Atlanta, GA 30348-5281
The easy and fastest way to request your free credit report is online at www.AnnualCreditReport.com. You will be required to enter personal identifying information and answer questions to verify your identity.
Learn more about how to request your free credit reports.
What information is found
The report lists information grouped into five sections.
This section includes your personal information such as your name, social security, and date of birth. It will also list your current and previous addresses, and phone numbers too. Additionally, this section will show current and previous employers.
The credit section details your relationship with creditors and public agencies show your history of paying bills. This will include information provided by:
- Retail stores
- Banks and credit unions
- Finance companies
- Student loans and loan servicers
- Mortgage companies
- State and Federal Courts
The inquiry section shows a listing of companies that have accessed your credit report. Companies that received your I.D. or other information to offer you credit, providing a service, or for employment. There are two types of inquiries: soft and hard. These inquiry types impact your credit score differently. Learn more about credit report inquiries.
Collection items are listed in your report and are unpaid debts that have been sold or transferred from the original creditor to a collection agency.
Public records section lists liens, foreclosures, bankruptcies, civil suits and judgments, and criminal arrest and conviction records. The reports may also include information on overdue child support provided by a state or local child support agency or verified by any local, state, or federal government agency.
Your Credit Report Does Not Contain Information About
- Political party affiliation
- Medical history
- Criminal record
How companies use credit reports
Lenders use these reports to help them decide if they will loan you money, what interest rates they will offer you, or to determine whether you continue to meet the terms of the account. Other companies can also purchase reports to help them make business decisions such as providing or pricing insurance; renting you a residential property; providing you with cable, internet, utility, or cellphone services; and (if you agree to let them look at your credit report) making employment decisions about you.
Why is a credit report review important?
Knowing what’s on your report helps you maintain the accuracy of the information. It will also allow you to get better rates or terms when applying for credit. And can be the reason you’re approved or denied service. Additionally, reviewing your report annually is a preventative identity theft measure.
Are you ready for today’s assignment? Let’s go.
Day 11 Assignment
Let’s review your credit report in more detail. Carefully check your report for accuracy. Your credit report contains a large volume of information. Look very closely.
- Get one credit report from AnnualCreditReport.com.
- Print the report. Use a highlighter or pen to mark questionable information.
- Print and use the checklist to review each section of the report.
- Make notes of any discrepancies.
- Dispute incorrect or inaccurate information. (Learn more about credit report disputes).
Credit Report Review
|Personal Information||Verify your name, social security, date of birth and current and previous addresses, and phone numbers.|
|Employer Information||Verify current and previous employers.|
|Credit Accounts||Verify account status (closed, opened), creditor names, date opened, credit limits, balances, and payment history.|
|Inquiries||View soft and hard inquiries. Verify hard inquiries are from your attempts to acquire credit.|
|Collection items||Verify for any outstanding collection reported.|
|Public Records||Verify public records such as bankruptcy, civil suits, foreclosures, judgments or liens.|
|Repeat review for all credit bureaus. Check after completion.||Experian [ ]||TransUnion [ ]||Equifax [ ]|
Credit Report Review Tips
- Pull only one credit report at a time. Review the information for accuracy. And dispute incorrect information directly with the credit bureau. You can use the online disputes found directly through the website.
- After reviewing one credit report, verifying information is accurate or disputing inaccuracies, then proceed with the next report from another bureau.
- Don’t overwhelm yourself. You can spread out the review process. Just use this template to help you.
On a future challenge, you’ll be tasked at improving or strengthening your creditworthiness. But for now, focus on the accuracy of your credit report. Improving accuracy may lead to an improvement in your credit score.
The following are useful and recommended tools:
- Credit Karma offers you two free credit scores and access to credit report cards using the information found on your TransUnion and Equifax credit reports.
- Credit Sesame is another free credit monitoring service that offers free identity theft protection services.
- Personal Capital is a free personal finance app with a 360-degree view of your money. With Personal Capital, you can see all your accounts in one place with planning and analysis tools.
Next Daily Challenge: Day 12 – Banking Relationship: Are they still working for you?
Credit Report Review FAQs
Do I need to review my credit report if I use a credit reporting app?
Yes. It’s highly recommended you review your actual credit reports pulled from AnnualCreditReport.com at least once every 12 months. With credit report apps, what you get is a report card or summary of information. This is useful in helping you with day-to-day or month-to-month tracking. However, any discrepancies or alerts you get from the apps will require you to directly dispute the information with the credit bureau.
What happens if I find incorrect personal information?
If you found inaccurate information, dispute the information directly with the credit bureau. You’ll be able to file a dispute online. Be very detailed about the reasons for your dispute. Include any correspondences, names, dates, and resolutions from creditors or agencies. Additionally, attach any documents to support your claim. Learn how to dispute information on your credit report online.
Why am I seeing another name or address on my report?
Finding additional names or other residencies might indicate a fraud attempt. Dispute the name, addresses, or any other personal information that is inaccurate with the credit bureau. Then make sure you verify the information on other reports too. You may be required to send proof to prove your identity.
What if I don’t recognize a credit card or loan?
An unrecognized credit account on your report can mean two things. First, it’s a mistake by the bureau and can easily be rectified by disputing the information. Second, it can be an indication you’ve been a victim of identity theft.
With ID theft, someone used your information to obtain credit. Verify your names and addresses are accurate. Review the hard inquiry section for recent credit card application activity. In some instances, an unrecognized credit may be found if you’re a co-borrower and cosigner on a loan or an authorized user on a credit card.
How do I remove a hard inquiry?
Hard credit report inquiries will remain on your credit report for 2 years from the credit application date. In the event, inquiries are showing past the two years or find an inquiry error, dispute directly with the bureau. Learn more about credit report inquiries.
What if I am a victim of identity theft?
Contact the credit bureau immediately. Request to have a fraud alert placed on your credit report. Additionally, request a credit freeze with all bureaus. Learn more about how to respond if you’re a victim of identity theft.
How do I dispute inaccurate information?
Start the dispute process online. Keep a log of the disputes you’re making, the date and time, and any information you are supplying to support your claim. Credit bureaus are required by law to only report accurate information. However, it’s up to you to remain vigilant about the accuracy and dispute errors promptly. Learn more about how to file a credit report dispute.
What can I do about collection accounts I don’t recognize?
You can dispute the collection with the credit bureau. The bureau will verify the information and get back to you within 30 days of their findings. If the information is verified, then you’ll need to contact the collection agency directly.
Reach out to the listed collection agency found on the credit report. There are steps you can do to make the process better for you. For example, you can request a debt validation letter. And make sure you keep notes of the dates, times, and representatives you’re speaking with. Sometimes, it may be necessary to settle your collection debts. Learn more about disputing collection accounts.