This week I took advantage of the opportunity to review copies of my credit report from all three credit reporting agencies. Thanks to the Fair and Accurate Credit Transactions (FACT) Act of 2003, consumers can access a free copy of their credit report at each of the three major credit reporting agencies. You can access them online for a full month and can print (and sometimes download) a copy for your records. While you can't get your FICO rating (credit score) for free, the items on your credit report directly affect this score and should be reviewed periodically.
Each time I've looked at my credit reports I've noticed inconsistencies. Sometimes these are minor (like my current employer or an incorrect home address), but sometimes I notice that something major has been recorded incorrectly. This year I noticed that a credit card on my report had a "negative" rating. We have never been late in our payments, so I was immediately suspicious. When I looked into it further, I discovered that the credit card was not ours. The account was for a gasoline company we never purchase from, and the account was opened in 1972 (I was born in 1978)! Through a simple online dispute process I was able to get the account removed from my credit report within a day or two. Because of the FACT Act, I was able to identify and correct these inconsistencies with no personal cost and little hassle.
I can't stress how important it is to check this information regularly! These reports are the basis for our credit scores which in turn can affect our current and future borrowing. Many credit card companies check their customer's credit scores every 6-12 months and adjust rates accordingly.
If you have inaccuracies on your credit report, you could find your rates increasing without just cause. For future borrowing, loan interest rates and loan approvals are heavily influenced by our credit scores. Credit scores are "sticky up" but not down; basically, it takes a lot more effort to raise your credit score than it does to bring it down. Making sure that your credit score is accurate is in your best interest and could save you a lot of time an money both now and in the future. And, it could be the simplest way for you to quickly raise your credit score!
To access your credit reports at each of the three credit reporting bureaus, vist the website www.annualcreditreport.com. (This website is sponsored by the three credit bureaus and the Federal Trade Commission).
For more information about the FACT Act and free annual credit reports check out this article on Wikipedia:
http://en.wikipedia.org/wiki/Free_credit_report
Here are some helpful websites that give a simple explanation of what makes up a credit (FICO) score and the best methods for raising your score:
http://en.wikipedia.org/wiki/Fico_score
http://www.myfico.com/CreditEducation/ImproveYourSCore.aspx
http://www.cbsnews.com/stories/2008/03/23/business/main3960888.shtml
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