Maintaining healthy credit is crucial for your financial well-being, and one of the simplest ways to do that is by reviewing your credit report annually. Under federal law, you’re entitled to a free copy of your credit report from each of the three major credit bureaus —Experian, Equifax, and TransUnion — every 12 months. Taking the time to review these reports each year can help ensure that your credit information is accurate!
What is a Credit Report?
Your credit report is a detailed record of your credit history and your current financial activity. Lenders, landlords, and even some employers review your credit report to gauge your financial reliability. It includes information about the types of credit accounts you have such as credit cards, mortgages, and car loans. It also includes your payment history, account balances, and whether any accounts are in collections.
Why you should order your credit report every year
Knowing what’s in your credit report is key to understanding how others view your financial history and to ensuring that the information is accurate!
- Identify Fraudulent Activity Early: Reviewing your credit report on a regular basis can help you catch any errors or signs of fraudulent activity, allowing you to take action sooner rather than later.
- Address Potential Red Flags: Even if there is no fraud, your credit report may reveal red flags, such as late payments or high account balances. Spotting these early enough could give you a chance to adjust your habits before they impact any future loan approvals!
- Report Any Errors Promptly: Mistakes can happen and sometimes information on your credit report can be inaccurate. If you find an error on your report, you can dispute it with the credit bureau. Correcting mistakes can help improve your credit profile and prevent any negative impact on future applications. For guidance on reporting errors, you can refer to the Consumer Financial Protection Bureau’s resources here.
Free Credit Monitoring vs Annual Credit Report
A free credit monitoring service can be a helpful tool to keep an eye on your score, but it’s important to understand the difference between credit monitoring and reviewing your full credit report. While monitoring services are convenient, the annual credit report provides a more complete view of your credit profile.
- Credit Monitoring Services: Many free services provide alerts for changes in your credit score but it’s not always as comprehensive as what a lender might see.
- Annual Credit Reports: A full credit report includes the complete, detailed information lenders will look at when you apply for a loan.
Ordering your annual credit reports is easy! The official site to access all three reports for free is AnnualCreditReport.com, which allows you to download each report online. You can also order by phone at 1-877-322-8228 or request a copy by mail.
