Look at any personal finance blog and chances are you’ll read the same advice at some point: check your credit report! It’s important to read your credit report! Make sure you look at your credit report at least once a year!
Okay, the advice probably doesn’t include exclamation points, but the sentiment is usually the same. Worse, many of these blogs don’t tell you what you should be “checking” for when you look at the report. In short, you need to look for incorrect information and this means carefully reviewing the report.
Luckily, it’s not that complicated once someone points you in the right direction and that’s exactly what we aim to do. So head to Quizzle.com or AnnualCreditReport.com to get a free credit report and read on to see what you should look for:
[Free Resource: Check your free credit report and score]Personal info that’s wrong.
On a credit report, everything matters. Make sure your name is spelled right, down to suffixes and hyphens that have been added or removed incorrectly. Even a slight difference could mean that they’ve mixed you up with someone who has a similar name – but a different, possibly worse credit situation. And if you notice a different address, it might be a sign that someone’s been using your credit accounts, but was stupid enough to route bills to their address.
Public records inaccuracies.
Credit reports don’t just list credit info, they include any judgments, bankruptcies and liens you might have against you. Different types of public records stay on your report for different amounts of time, so if you see something you think should be gone, you need to try to get it removed because it could be negatively impacting your credit.
Unfamiliar accounts or activity.
In the accounts section, you’ll see things like your current balances, the date you opened each account and your credit limit. If you come across an account you don’t recognize or thought you closed, this should be a red flag. Someone besides you could be using it without your knowledge. Also, look for things like charge-offs and information about late payments that’s incorrect.
Whenever you open a new credit card account or agree to let an insurance company or prospective employer check your credit history, it shows up as an inquiry on your report. Sometimes, you can even be denied credit if there are too many of these inquiries within a certain amount of time, so what you want to look for are inquiries that should be gone from the report – after two years, they are supposed to go away.
If you find an error, inform the credit reporting company in writing. You may have to provide documents to back up your claim, but you should always give copies and keep the originals just in case.