Credit Report & Score
Protect your identity and your finances by reviewing your credit report and score.
According to the Fair and Accurate Credit Transaction Act (FACT Act), you can request a free credit report once every 12 months from each of the three major credit bureaus: Equifax, Experian, and TransUnion. They have joined efforts to offer a centralized way to obtain information about your credit reports through: www.annualcreditreport.com. This secure site allows you to request, view, and print your report, and also offers options to request your report by phone and mail.
How often should I obtain my credit report? This is entirely up to you. You may request one from each bureau at the same time to compare your information. You won't, however, be able to request another free report for 12 months (you can purchase other reports at anytime; the maximum cost that can be charged is $10.50). Another idea is to request your report about every four months from one of the bureaus (rotate the bureau you select).
What is a credit score? A credit score is a three-digit number that lenders use to objectively measure your creditworthiness. It allows creditors to rank you from high to low in respect to the likelihood of repaying credit. For example, if you have a high score, you're likely to repay. If you have a low score, you're less likely to repay. Your credit score is a snapshot of your finances at a particular moment in time. As information in your credit file changes, so will your credit score. For instance, if you use your credit card, or pay the auto loan company, these activities are going to change the information in your credit file.
What factors are taken into consideration for your credit score? There are five different categories that are considered for your credit score.
- Payment History: This is probably the most important factor. Have you had an account sent to collections? How many times have you been late? How late or how recent were those late payments?
- Amount Owed: How much overall debt do you have? How many credit cards have balances on them? How many are close to their limits? How close are you to your overall credit limit?
- Length of Credit History: Are you an emerging consumer or someone who has paid bills on time for 10 years?
- New Credit: Are you shopping for credit right now? A lot of activity and inquiries on your credit report raises suspicion. Perhaps there is a change in your life that is not reflected on your credit report, like a divorce or lost job. These situations may impact your financial situation.
- Types of Credit Used: Do you have a "healthy" mix of credit cards, secured loans, a mortgage loan, and so on?
What can you do to improve your credit score? Changing your credit score in a short period of time is not easy to do. This is because your credit score takes your entire credit history into account. One of the best ways to improve your credit standing is to pay bills on time and keep your balances low on your credit cards or any other revolving accounts. Also, check your credit report at least once a year to make sure the information is correct. Inaccurate information could negatively influence your score.
Where can you find your credit score? Companies like Experian, Equifax, and TransUnion can give you your credit score and an explanation behind it. When utilizing: www.annualcreditreport.com to obtain your report, they will give you the option of obtaining your score at the same time. There typically is a minimal fee involved. Here is the information on the top three credit reporting companies:
- Experian: PO Box 949, Allen, TX 75013-0949; 888.EXPERIAN (888-397-3742)
- Equifax: PO BOX 740241, Atlanta, GA 30374-00241; 800-685-1111
- TransUnion: PO BOX 1000, Chester, PA 190222; 800-916-8800