It's Not Too Late to Order a Free Credit Report
Forgot to check your credit report this year? No apologies, please. This was the first full year, under the Fair and Accurate Credit Transactions Act, that every American was entitled to a free annual report from all three major credit bureaus–Equifax, Experian, and TransUnion–available at www.annualcreditreport.com.
There's still time. You can request a report without charge from all three bureaus at once. Next year, you might opt to order from one agency, then check another a few months later to keep track of any new information that appears.
Data may differ among the bureaus, so you will want to contact all three to evaluate their records. If you're uneasy about submitting your Social Security number online, you can write to Annual Credit Report Request Service, PO Box 105281, Atlanta, GA 30348-5281 or call (877) 322-8228.
If you find an error, contact the bureau immediately (the address is on the report). By law, the credit bureau has 30 days to investigate and respond. The bureau must correct, or remove, inaccurate information and send a revised report to anyone who has requested your report in the past six months.
A credit score, the magical three-digit number–generally ranging from 300 to 850 and playing a pivotal role in nearly all aspects of your financial world–is not gratis. You can purchase a score for around $6 from each of the bureaus when you order your free report. Scores are generated from data pulled from credit reports provided by all three credit bureaus. They look back over the previous 24 months to see how you have handled your credit.
A range of factors determine the score–whether you pay your bills on time, how much you owe, as well as the length of your credit history. Never using credit, in fact, can hurt you because you have no record to rate. But the biggest factor influencing your credit score could be errors in the report itself.
The higher your score the better. Half of all Americans have a score above 720, according to Craig Watts, spokesman for Minneapolis-based Fair Isaac Corp., which offers the scoring system most lenders rely on, known as FICO scores. FICO scores are the most widely used, although the credit reporting agencies introduced their own version, called the Vantage Score, in June.
Knowing your score should be one of your New Year's resolutions. Why? It's the figure that your potential lenders and landlords will use to decide whether you are creditworthy. It can influence your car and home insurance rates.
And, surprisingly, a low score might even result in being turned down for a job. Today, about 20 percent of employers say they always look at it to make a decision on your character and your ability to perform certain job duties, according to the Society for Human Resource Management. An additional 24 percent say they sometimes look at it.
Your score is recalculated each time it's requested, based on the latest information. "Knowing your score at any point gives you a sense of your creditworthiness and can push you to take action by staying well below your credit limits, paying your bills on time, and making at least the minimum payment," counsels Gerri Detweiler, author of The Ultimate Credit Handbook.