Your credit score impacts what you pay for car and home insurance which is why I invited Carol Uekert, today’s guest blogger to write today’s post. Carol outlines how to check your credit for free and why that’s important. Carol is the owner and founder of Accountable Credit Repair, a firm helping people legitimately repair their credit.
We are sometimes harshly judged by what is deemed as our “credit worthiness”. An individual’s personal credit profile is very influential and has become more important than ever before. It can be used as a large decision-making component in many areas of our life including, financing and the interest rates we pay, our ability to rent an apartment or house, and the insurance rates we are charged. It can even make or break a deal when pursuing or keeping a job. Many important decisions are made based on what others read about us on our credit report.
Again, I’ll ask, how is your credit? Do you really know what other people are reading about you? The idea of pulling your credit can seem daunting, but it really is not that difficult to do.
A great place to start is at the only source for free credit reports authorized by Federal Law: www.AnnualCreditReport.com. 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*. This website will take you through the process of pulling those reports. The easy to follow directions will guide you to each bureau’s site where you will be asked to answer a series of questions that both identify you and that are designed to protect your security and make sure it is truly you that is seeking your personal report. These reports can be printed but are usually lengthy, so it is best to first save them to a file. Credit reports pulled at this federally authorized site will not disclose credit scores.
A credit report will have personal information such as your name(s), date of birth, current and previous addresses and employment history. The report will also contain account history and will be organized by good tradelines both open and closed, as well as any derogatory accounts that are reporting in your name. The report may also report public records (liens, bankruptcies, and judgments) that have been filed in your name.
It is very important that you take the time to look very carefully at every section of all your reports. It has been estimated that over 80% of credit reports have inaccuracies. Since we are judged in so many instances by our credit worthiness, isn’t it important to make sure what people are reading about you is completely accurate? In fact, you have the right to have a credit report that is: 100% accurate, 100% verifiable by the company reporting the information, and only reporting information that is within the time-frame allowed by law. But, the burden of proof rests on the individual consumer to check all the information being reported and to dispute anything that is not correct or allowed.
If you want to see your credit scores, in almost all cases you will have to pay for them. There are many reliable credit monitoring sites that will allow you to keep on top of your credit activity, providing you with a “refreshed” credit report on a regular basis and also a system to alert you of any new inquiries or changes to your credit profile. Most sites will generally charge a monthly subscription fee that can range from about $15 to $40, but the benefit of catching a mistake or being quickly alerted to identity theft can far outweigh the cost.
The scores we, as consumers are allowed to pull are called “Vantage” scores. When we go to a bank, a lender or even a car dealership to have credit pulled, they will likely pull a type of (there are many) the “FICO” score model. Vantage scores are calculated using the same methodology as the FICO score models, but some parts of your tradeline activity and history and overall credit profile are weighted differently than with FICO. For instance, a lender can pull a FICO score from a mortgage standpoint. This score will be much more conservative, and will likely report lower than the typical Vantage scores.
I encourage all consumers to run a credit report on themselves and go over it very carefully on a regular basis, but at the very least, once per year. Pulling a credit report is not difficult to do, and can provide very valuable information about what others are reading about you.
Carol Ueckert, Owner
Accountable Credit Repair
*Under federal law, you’re entitled to a free report if a company takes adverse action against you, such as denying your application for credit, insurance, or employment, and you ask for your report within 60 days of receiving notice of the action. The notice will give you the name, address, and phone number of the credit reporting company. You’re also entitled to one free report a year if you’re unemployed and plan to look for a job within 60 days; if you’re on welfare; or if your report is inaccurate because of fraud, including identity theft. Otherwise, a credit reporting company may charge you a reasonable amount for another copy of your report within a 12-month period.