Take Five Minutes – Check Your Credit Report
The start of the year is an excellent time to check your credit report(s). Every year, you are entitled to a free copy of your credit report from each of the three main reporting agencies (Equifax, Experian, and TransUnion). Roughly 25% of all credit reports are said to have incorrect information, but making sure your report is accurate is only one of the reasons that I’m urging you to take time for this review.
Several years ago, I worked with a client (“Beth”) who had her identity stolen. A bunch of loans and credit cards were fraudulently opened in her name, used, and abandoned. Unfortunately, it was more than six months before Beth had any indication that anything was wrong. Although she was not ultimately responsible for the stolen money, Beth had to spend tens of hours on the phone with banks, credit card companies, and the police to clear everything up. I don’t want any of my clients to use a large chunk of their free time when a five-minute checkup might help.
It’s shocking how much information is gathered by these companies:
- Credit reports have personal data like your name, address(es), and place(s) of employment.
- Your credit report also has detailed information about your credit cards and loans. For all credit cards associated with you (open or closed), you’ll find your balance, credit limit, account type, and payment history. For your loans, you’ll see loan balances, original loan amount, and your payment history.
- Bankruptcy, foreclosure, repossessions, and tax liens (if any) are listed on your report.
- You’ll also find a section of recent credit “inquiries.” This is a list of companies that have looked at your credit history. It’s humbling to see who is looking at your credit.
Thus, given the amount of information that these agencies are gathering from so many different sources, it’s not surprising that they get things wrong. A periodic review of your credit report allows you to fix any errors and (more importantly) see if you might have any identity theft issues.
Fortunately, reviewing your credit report takes only a few minutes.
Follow these steps:
- Get started. Go to AnnualCreditReport.com and click “Request Yours Now!” and then click “Request Your Credit Reports.”
- Fill in the personal information form.
- Pick which credit report you want to see. Although you can check all three credit agencies at one time, I prefer to check one every three months so I can catch “issues” more quickly.
- Answer some oddly specific questions. Once you choose a specific report, you will jump to that credit-reporting agency’s website where you will be asked questions that’ll verify your identity. The questions can be tough as they might ask about current/past accounts or addresses.
- Review your report. Look for misspellings, invalid names, wrong addresses, loans, or cards you don’t recognize. Contact me if you find any information that needs clarifying – I have information for how to best file a dispute.
- Leave. Click on “Return to AnnualCreditReport.com” when you are done.
If you have not reviewed your credit reports in a while, the process will be eye-opening. Let me know how it goes!
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