If you’re going to apply for a credit card, a mortgage, a loan or any other source of finance, one thing any potential lender will check is your credit report. This will tell them about any previously unpaid debts or legal judgments against you and help them assess whether you are creditworthy or not.
There are three nationwide consumer reporting companies in the US: Experian, Equifax, and TransUnion. All keep different information about you, and all or any of them may be referred to by a potential lender.
If you are thinking of applying for credit, therefore – and especially if you have ever been turned down in the past – it is important to find out what these companies have on their records about you. And because all three companies are independent, you need to check on all of them.
The good news for consumers is that as from September 1, 2005, everyone in the US is entitled to a free copy of their credit report from each of the consumer reporting companies once a year.
To get free copies of your credit report, you should not apply to the three companies directly. There is only one website that is authorized to give out free credit reports, and this is at www.annualcreditreport.com. You can also get your free credit report via telephone by calling 877-322-8228.
If you find a mistake on your credit report – for example, a debt that isn’t yours or a disputed amount – you’ll need to fill out the form that comes with the report, or follow the instructions on the explanatory sheet. Upon receipt of a challenge, a credit reporting agency must investigate the claim, usually within 30 days.
As long as a charge is in dispute, it will still show up on your report. Long-time lenders say it’s common for reports to have errors. Some estimate that as many as 80 per cents of all credit reports contain some kind of misinformation. So it really is important to take advantage of this free opportunity to check your credit report, even if you’re not currently planning any finance applications.