Consumers need to protect their credit at all times. The better someone's credit score is, the lower the cost to borrow money. The lower the cost of borrowing, the more money the borrower gets to keep. Credit reports are important for more than simply borrowing money. Poor reports can affect job applications and apartment requests too. Consumers who regularly review their credit reports can verify the information is correct, catch signs of identity theft and start the process to correct errors before a lender denies a loan or an employer passes on a job offer.
An easy step everyone can take to monitor their credit is to take advantage of the free credit reports available from the three major credit reporting agencies. Reports from Equifax, Transunion and Experian are available at the Annual Credit Report Web site for no cost once per year. Rather than request all three reports at the same time, I suggest rotating through the three agencies once every four months. The process to request a report only takes a few minutes and by spreading out the requests, you minimize the gaps between checks and could catch a fraudulent account sooner. The agencies do not share data, so an erroneous charge shown on one report might not be on the other. In other words, don't expect that by checking one agency you are covered.
The reports do not follow a standard format from agency to agency, but the information is fairly simple to read on each report. You should be sure that each account on your credit report is (or was) yours. You can quickly scan through the lists to find any accounts that have been flagged for late payments or have been sent to collections. If you find any incorrect information, contact the company that issued the account and contact the credit reporting agency to start the process of cleaning up the report.
More Credit Tips:
- Equifax says, "It is a good idea to keep your oldest credit account open, as a high average account age generally demonstrates stability to lenders. Also, especially if you have been managing credit for a short time, opening many new accounts will lower your average account age and may have a negative impact."
- Experian points out, "When you marry, your credit report stays the same. The only information on both spouses’ reports are joint accounts or those for which one spouse is an authorized user."
- Collections are supposed to fall off your credit report after seven years. Transunion says, "If your collection account is more than 7 years old, it should be removed from your credit report. The best way to correct this is by contacting the credit bureaus and explaining the inaccuracy."
