Q: What is a credit report?
A: Credit reports are summaries of our creditworthiness used by creditors or lenders. There are three nationwide consumer reporting companies which collect credit information – Equifax, Experian and TransUnion. The information collected and placed on a credit report includes personal data, a summary of credit history, detailed account information, inquiries from lenders into an individual's credit history, details of accounts turned over to a credit agency, and any disputes to the information from the individual. Essentially, the agencies keep track of your ability to pay bills on time, whether you've been sued or arrested or have filed for bankruptcy. Generally, information that is truthful and accurate stays on the report for about seven years. Bankruptcy filings remain on the report for about ten years.
Q: Where can people go to check their credit report?
A: Visit www.annualcreditreport.com or call 1-877-322-8228 to request free copies of your credit reports. You're entitled to one free copy of your credit report from each of the three nationwide consumer reporting companies every 12 months under the Fair Credit Reporting Act. The information is free. There is a charge to get your credit score. Although other companies that seem similar to www.annualcreditreport.com might say their services are free, they may charge after a trial period, try to sell something, or collect your personal information for other purposes.
Q: Why should people check their credit report?
A: Information in a credit report may affect interest rates for loans, insurance rates, acceptance of a rental applications, and in some instances, it may affect your employment. Each nationwide consumer reporting company receives requests and information from different sources. Therefore, it's important to verify the accuracy and completeness of all three agencies because any negative information included in the credit report can be very costly.
Q: What happens if the information is wrong?
A: Whether the information is wrong or just incomplete, both the consumer reporting company and the creditor are accountable to correct it under the Fair Credit Reporting Act. According to the Federal Trade Commission, people should contact both the consumer reporting company and the creditor in writing about the information that is inaccurate so that both investigate the matter in a timely fashion. If the dispute is correct, the consumer reporting company will notify the other consumer reporting companies so all the credit reports will have the correct information. The creditor then cannot report the information again. If the dispute isn't resolved by the investigation, a statement of dispute can be included in your file and in future reports upon request. Again, it's up to each of us individually to responsibly check our credit reports to make sure that everything is current and factual.