When was the last time you looked at your credit report? Having good credit impacts everything from the interest rates you receive on loans and mortgages to your ability to secure insurance. But mistakes on your report are more common than you may think.
In fact, a recent study by Consumer Reports and WorkMoney revealed that nearly half of us have errors lurking on our reports. Since National Get Smart About Credit Day is coming up on October 16, there’s no better time to give your credit report a good once-over.
Not sure how to begin? Don’t worry! We’ll explain why keeping tabs on your credit is a smart move, walk you through exactly how to do it, and tell you what steps to take if you happen to spot any mistakes.
Why you should check your credit report
Think of your credit report as a financial report card, showing how you’ve handled loans and credit accounts over time. Lenders use this information to generate your credit score, a three-digit number that helps them decide how likely you are to repay borrowed money. The higher your credit score, the better your credit is.
Many people only check this report when they’re about to make a big purchase, like a car or a house. But waiting that long can be risky. Any errors or signs of fraud could already be hurting your creditworthiness, potentially leading to higher interest rates or even getting your loan application turned down. While you can fix mistakes, it takes time. Checking your credit report regularly means you can spot and address problems early, giving yourself time to correct them before they cause major financial headaches.
Your quick guide to checking and monitoring your credit
Keeping an eye on your credit doesn’t have to be complicated! The Fair Credit Reporting Act makes it easy and free to check your report. Here’s a simple step-by-step guide:
Step 1: Get your free credit reports
Go to AnnualCreditReport.com, the official site for free reports from Equifax, Experian, and TransUnion. Follow the prompts to verify your identity and request your reports — you can access them weekly at no cost.
Read each report carefully. Confirm your personal information is correct, make sure every account listed belongs to you, and review the payment history on each account for accuracy. Check recent inquiries to ensure you recognize them and note any negative items such as late payments or collections. If you spot errors, set them aside to dispute with the bureau that’s reporting the mistake.
Step 2: Consider free credit monitoring tools (optional, but helpful):
Many banks, credit card companies, and even some credit report providers offer free tools that send you alerts when there’s new activity on your credit file. They can help you catch potential fraud or errors more quickly than just checking your full report. You can sign up for these through your existing accounts or trusted services.
Step 3: Set up account alerts (easy extra security):
Most banks and credit card companies let you set up alerts for things like large transactions, unusual activity, or changes to your account information. These alerts can help you spot unauthorized use early.
Step 4: Review your monthly statements:
Don’t just pay your bills – actually look at your bank and credit card statements each month. Make sure all the charges and transactions are ones you made. Report anything suspicious right away to your bank or credit card company.
What to do when you spot an issue
If you find an error or suspect fraud, it’s important to act fast to get it corrected. Here’s what to do:
Reporting credit report errors:
- Gather proof: Collect documents showing the information is wrong.
- Dispute with each bureau: Contact Equifax, Experian, and TransUnion separately in writing (certified mail is best).
- Explain the error: Clearly state what’s wrong and why, including copies of your proof (keep originals).
- Include your info: Provide your full name, address, birthdate, Social Security number, and ID copy.
- Wait for results: Bureaus have about 30 days to investigate and will send you their findings. You can add a statement if they disagree.
Reporting fraudulent activity:
- Contact affected creditors: Tell companies about the unauthorized activity. Follow up in writing.
- File a police report: Get a report documenting the identity theft.
- Place a fraud alert: Contact one credit bureau to put an alert on all three. Consider a credit freeze for stronger security (contact each bureau).
- Review credit reports: Check all three reports for any other fraudulent activity.
Contacting creditors directly
For issues on your credit report that seem to stem from a specific lender’s reporting, contacting them directly can sometimes speed up resolution. If you spot an incorrect account detail like the balance or payment history, find their customer service contact info (often on statements or their website) and explain the problem clearly in writing, including any supporting documents. Keep a record of all communication. If the creditor doesn’t fix the issue, you may still need to dispute it with the credit bureaus.
Dealing with errors or fraud can feel overwhelming, but remember to take it one step at a time and keep thorough records of all your communications.
Final thoughts
National Get Smart About Credit Day is the perfect time to commit to regularly monitoring your credit. It’s your best defense against errors and fraud, and key to maintaining or rebuilding a healthy credit score for future financial goals. Beyond checking reports, remember that good credit habits – paying bills on time and managing credit use wisely – have a big impact on your credit score. Also remember to protect your personal information carefully and stay alert to potential scams. So, take these proactive steps and make credit monitoring a regular part of your financial routine.
