What Goes Into A Credit Score
Each company has its own way to calculate your credit score. They look at:
- how many loans and credit cards you have
- how much money you owe
- how long you have had credit
- how much new credit you have
They look at the information in your credit report and give it a number. That is your credit score.
It is very important to know what is in your credit report. If your report is good, your score will be good. You can decide if it is worth paying money to see what number someone gives your credit history.
Your credit history is important. It tells businesses how you pay your bills. Those businesses then decide if they want to give you a credit card, a job, an apartment, a loan, or insurance.
Find out what is in your report. Be sure the information is correct. Fix anything that is not correct.
Check Your Credit Report
Because your credit score is so important in getting loans, credit, and housing, its important to check your credit reports regularly to make sure they are correct and complete. Checking your credit reports will also alert you to identity fraud because youll see if someone has opened accounts in your name or if late payments have been reported for purchases you didnt know about.
You can get one free copy of your credit report every 12 months from each of the three major credit reporting companies . All three credit reporting companies collect credit information, but different things may show up on the different credit reports. You can monitor your credit for free by getting free copies of your credit report. There are two common ways to do this:
In addition, you can get a free copy of your credit report:
Annual Credit Report Request ServiceP.O. Box 105281Atlanta, GA 30348-5281
How We Chose The Best Free Credit Reports
We evaluated and selected the best free credit reports based on a few factors, including the number of credit reports you can access, the frequency of updates, the ease of understanding the information, the ease of signing up for a new account, and whether a free credit score or analysis was also included. We excluded any companies that required credit card information to sign up or that only offered a free credit report on a trial basis.
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Why Do I Have A Credit Report
Businesses want to know about you before they lend you money. Would you want to lend money to someone who pays bills on time? Or to someone who always pays late?
Businesses look at your credit report to learn about you. They decide if they want to lend you money, or give you a credit card. Sometimes, employers look at your credit report when you apply for a job. Cell phone companies and insurance companies look at your credit report, too.
Why Should You Check Your Credit Report
Mistakes happen. In fact, a study finds that 34% of consumers have at least one error on their credit report. These errors can affect your ability to get approved or cause you to pay higher rates when you are approved. The only way to verify that your credit report contains the right information is to review the information on an ongoing basis.
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Why You Should Check Your Credit Report Regularly
Your credit report shows any credit cards or loans you have open as well as the balance on those accounts. Whether you have a lot of debt or no debt at all, its important to keep tabs on this report because you need to prove good credit health if you want to access new creditlike to buy a new car or homedown the road.
The CARES Act required many creditors to report accounts in temporary forbearance as current instead of past due, including federal student loans, which are on pause through May 1. This important difference can help preserve credit scores as much as possible during the pandemic.
Fraudsters have made quick work taking advantage of people during the pandemic: Identity theft reports made to the Federal Trade Commission more than doubled between 2019 and 2020, with credit card fraud, government documents or benefits fraud, and loan/lease fraud the most prevalent types of identity theft in both 2020 and 2021.
Checking your credit report often helps you identify potential fraud quickly and mitigate potential long-term damage to your credit. When scammers steal your information, they can continue to defraud you, so you should keep monitoring your credit reports.
Free Weekly Credit Reports During Covid Extended Through December 2022
The three national credit reporting agencies Equifax, Experian, and TransUnion have extended until December 31, 2022 a program that lets you check your credit report at each of the agencies once a week for free.
Visit AnnualCreditReport.com to request free copies of your credit reports. Other sites may charge you or be fraudulent sites set up to steal your personal information.
By law, everyone is entitled to one free credit report every twelve months from each of the three credit reporting agencies. In 2020, soon after the COVID-19 pandemic upended the finances of millions of people, the three agencies announced they would temporarily make free reports available every week. The program was set to expire on April 20, 2022 but has been extended through the end of 2022.
Why check your credit report? Your report shows things like how many credit cards and loans you have, whether you pay your bills on time, and whether any debts have been turned over to collections. Creditors, insurers, some employers, and other businesses use it to decide if they want to do business with you and the terms theyll offer you.
To learn more about why your credit matters, read Understanding Your Credit.
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Contacting The Credit Agencies Directly
If you prefer, you can call the major credit agencies directly and request a credit report at no charge. However, the FCRA-mandated Annual Free Credit Reports are only available through the website and phone number above. In other words, you might have to pay if you contact a directly.
The only way to get your annual free credit report is to use AnnualCreditReport.com or the phone number above. If you go any other route, you may have to pay or subscribe to a private service.
If you need additional credit reports , numerous companies try to sell subscription services or paid reports. That said, you might not need those services.
Contact the credit bureaus:
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We believe everyone should be able to make financial decisions with confidence. And while our site doesnt feature every company or financial product available on the market, were proud that the guidance we offer, the information we provide and the tools we create are objective, independent, straightforward and free.
So how do we make money? Our partners compensate us. This may influence which products we review and write about , but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. Our partners cannot pay us to guarantee favorable reviews of their products or services.Here is a list of our partners.
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Your Childs Credit Report
Parents can place a Protected Consumer security freeze on their childs credit reports to help prevent identity theft. Check a childs credit report before they turn 16.
Youll need to provide the following:
- childs full name
- copy of social security card
- addresses for the past two years
- copy of the parents drivers license
- copy of proof of residence for the parent, such as a utility bill
- guardians should include guardianship papers
Send or submit the information to each of the three major credit reporting bureaus.
How Do I Get A Copy Of My Credit Reports
You are entitled to a free credit report every 12 months from each of the three major consumer reporting companies . You can request a copy from AnnualCreditReport.com.
You can request and review your free report through one of the following ways:
- Mail: Download and complete the Annual Credit Report Request form. Mail the completed form to:
Annual Credit Report Request ServiceP.O. Box 105281Atlanta, GA 30348-5281
You can request all three reports at once or you can order one report at a time. By requesting the reports separately you can monitor your credit report throughout the year. Once youve received your annual free credit report, you can still request additional reports. By law, a credit reporting company can charge no more than $13.50 for a credit report.
You are also eligible for reports fromspecialty consumer reporting companies. We put together a list of several of these companies so you can see which ones might be important to you. You have to request the reports individually from each of these companies. Many of the companies in this list will provide a report for free every 12 months. Other companies may charge you a fee for your report.
You can get additional free reports if any of the following apply to you:
Dispute Errors On Your Credit Report
If your credit report has wrong information, you can dispute the error so that it is fixed. Here is how to dispute an error:
First, write a letter to the credit reporting companies that have the wrong information to ask them to fix the information. Include all of the following:
- Your name and address
- The specific information in your credit report that is wrong
- Why that information is wrong
- Copies of any receipts, emails, or other documents that support why the information is wrong and
- Ask that the information be deleted or corrected.
You may use the Federal Trade Commissions sample dispute letter to credit reporting companies and attach a copy of your credit report with the wrong items circled. Send the letter by certified mail or priority with tracking, and keep a copy of the letter and receipt.
If you cannot get the disputed information corrected or deleted, you may ask the credit reporting companies to add a statement noting your dispute in your file and in future credit reports.
Fix Your Credit And Improve Your Credit Score
Here are some tips on how to fix your credit and improve your credit score:
If you need help fixing your credit, contact a non-profit credit counseling service that can help you for little or no cost. You can also check with your employer, credit union, or housing authority to see what no-cost credit counseling programs may be available.
It takes time to build up or fix your credit. Unfortunately, there are a lot of fraudsters preying on consumers who want to fix their credit. Avoid any credit counselor or company that promises quick-fix credit repairs, promises to hide your bad credit history, requires upfront payment, or tells you to dispute accurate credit report information or to give false information to creditors.
Here are some resources to help you find a reputable credit counselor:
- Federal Trade Commissions Choosing a Credit Counselor: How to choose a credit counseling service
- Federal Trade Commissions : How to avoid credit repair scams
- Department of Business Oversights : Common questions about credit counseling services
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Can I See My Credit Report
You can get a free copy of your credit report every year. That means one copy from each of the three companies that writes your reports.
The law says you can get your free credit reports if you:
- go to AnnualCreditReport.com
Someone might say you can get a free report at another website. They probably are not telling the truth.
Determine How You Want To Request Your Report
You are entitled to a free credit report every 12 months from each of the three major consumer credit reporting companies: Equifax, Experian, and TransUnion. You can request and review your credit report in one of the following ways:
- Online: Complete the online application process on AnnualCreditReport.com, the official government website for requesting a credit report.
- Phone: Call 322-8228
- Mail: Download and complete the Annual Credit Report Request form. The completed form should then be mailed to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281
Image courtesy AnnualCreditReport.com.
Be on the lookout for suspicious websites that offer free credit reports, especially those mimicking the name and design of AnnualCreditReport.com. Some websites will only give you a free report if you buy their products or services, while others will give you a free report and then bill you for services you have to cancel. To ensure you’re going to the correct site, you can type www.AnnualCreditReport.com into your web browser address line or visit the Consumer Financial Protection Bureau ‘s website. If you find a link to AnnualCreditReport.com on a site you don’t trust or in an email, play it safe and don’t click on it.
You are also eligible for additional free credit reports if any of the following applies to you:
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What Is A Credit History
Sometimes, people talk about your credit. What they mean is your credit history. Your credit history describes how you use money:
- How many credit cards do you have?
- How many loans do you have?
- Do you pay your bills on time?
If you have a credit card or a loan from a bank, you have a credit history. Companies collect information about your loans and credit cards.
Companies also collect information about how you pay your bills. They put this information in one place: your credit report.
Fixing Errors In A Credit Report
Anyone who denies you credit, housing, insurance, or a job because of a credit report must give you the name, address, and telephone number of the credit reporting agency that provided the report. Under the Fair Credit Reporting Act , you have the right to request a free report within 60 days if a company denies you credit based on the report.
You can get your credit report fixed if it contains inaccurate or incomplete information:
- Contact both the credit reporting agency and the company that provided the information to the CRA.
- Tell the CRA, in writing, what information you believe is inaccurate. Keep a copy of all correspondence.
Some companies may promise to repair or fix your credit for an upfront fee–but there is no way to remove negative information in your credit report if it is accurate.
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Whats A Conditionally Free Credit Score
When it comes to accessing your credit scores, it may help to understand the difference between free and conditionally free. If a website or app requires you to input your credit card information at any point, you are not getting a truly free credit score but are instead getting a conditionally free score.
For example, some websites may offer you a free or inexpensive trial of a credit monitoring service. In exchange for signing up for the trial offer, you may be offered a copy of your credit report and what appears to be a free credit score. These websites will ask you for your credit card information.
When you sign up for one of these conditionally free credit services you must proactively cancel the service before the free trial period expires. If you fail or forget to cancel, you will be charged a monthly fee in perpetuity until you do cancel. Fees for monthly credit monitoring services generally run about $20 per month but can be considerably more expensive.
Place A Credit Freeze
Contact each credit reporting agency to place a freeze on your credit report. Each agency accepts freeze requests online, by phone, or by postal mail.
PO Box 530086Atlanta, GA 30353-0086
Your credit freeze will go into effect the next business day if you place it online or by phone. If you place the freeze by postal mail, it will be in effect three business days after the credit agency receives your request. A credit freeze does not expire. Unless you lift the credit freeze, it stays in effect.
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Are There Other Ways I Can Get A Free Report
Under federal law, youre entitled to a free credit report if
- you get a notice saying that your application for credit, employment, insurance, or other benefit has been denied or another unfavorable action has been taken against you, based on information in your credit report. Thats known as an adverse action notice. You must ask for your report within 60 days of getting the notice. The notice will give you the name, address, and phone number of the credit bureau, and you can request your free report from them
- youre out of work and plan to look for a job within 60 days
- youre on public assistance, like welfare
- your report is inaccurate because of identity theft or another fraud
- you have a fraud alert in your credit file
If you fall into one of these categories, contact a credit bureau by using the below.