To the average consumer, credit reports can seem mysterious. There’s often many different types of information included from a number of entities over many years. The three main credit bureaus all issue credit reports. However, even reports from the 3 credit bureaus can feature discrepancies. As such, you need to understand what information a credit report contains and then what you can do to fix any inaccuracies they may have.
Where do I get my credit report?
You can get your credit report from any of the three main credit bureaus and ideally you should get reports from all three since they can contain somewhat different information. These credit bureaus are:
There are other sites out there that’ll give you some credit report basics, but they lack the detail the three main agencies provide. By law each of the above agencies will give you one free credit report a year, so make the most of them.
What to look for when you check your credit report
When you check your credit report, you need to take a close look at what data the report actually contains. But you should first understand what types of data a credit report is based on.
Each credit report features information on your financial history and whether you’ve met your payment terms. It’ll show how much credit you have available, whether you’re using it, and the amount of debt you’re in. In addition, it’ll reveal whether any of your accounts are with collectors and whether you’re engaged in debt repayment plans with those collectors.
If you’ve found yourself in a financial mess in the past, your credit report will reveal it. This includes liens, bankruptcies, and even missed payments, all of which remain on your credit report for 7 years.
Who uses your credit report?
Aside from financial lenders, there’s a wide range of companies that may want to check your credit and financial history. If you need cable TV, Internet, or even a cell phone, the companies offering those services will want to make sure you’re capable of paying for them. The same goes for renting an apartment, finding insurance, and in some cases, securing a job. Not all prospective employers will want to peek into your financial past before hiring you, but doing so is necessary if you want to work in certain sectors, such as banking or even law enforcement.
Are credit reporting agencies consistent?
In most cases, credit reporting agencies are consistent and accurate. However, this does not always mean they show the same information as each other, or that all of their information is up to date. For this reason, it’s important to regularly check your report with all three main bureaus and do so at least once per year (after all, it is free.) If one is showing an inaccuracy, you need to request a correction by initiating a dispute with the credit agency that is reporting that inaccuracy.
As reporting information to credit agencies isn’t governed by a strict process, banks may offer data at different times and inconsistently. Couple this with the hundreds of millions of reports that credit agencies have to deal with on a regular basis and it’s no surprise that there are differences among the agencies. Most of the time a small discrepancy isn’t too much to worry about. Of course, you should still request they correct it by opening up a dispute, but it usually won’t affect your ability to obtain new credit or land a job.
However, a major discrepancy is serious and needs to be corrected as soon as possible. For example, an agency failing to remove a bad debt that’s long been settled can severely limit your ability to open a new credit card or even worse, get a job. When this happens, you need to notify that credit agency immediately to dispute the inaccuracy. Doing so is important, as there’s no telling which credit agency a lender or company is going to check before handing over credit.
In the end, check your credit report on a regular basis and make the most of those free annual reports. While it’s possible there may be differences between each report, try not to worry unless you’re dealing with a major inaccuracy that will severely impede your ability to secure the credit you need.