Credit reports are a very important, and very frustrating part of personal finance. Nearly all financing requires a credit score, which is generated from the information in your credit report. However, you get no say in what is in your credit report. In fact, with one exception, you have to pay money if you even want to see what your own credit report says about you.
Seems unfair? Blame the millions of dollars the finance industry spends on lobbying and the politicians that care more about where their next campaign contribution comes from than about what is right for the American citizens they supposedly represent.
There are various services springing up to help fill this gap, but they all come with the potential for scams and abuse.
You can get a free credit score from Credit Karma, or Credit Sesame, and you can buy a credit score from myFICO, but none of these come with full access to all three credit reports.
Free Credit Scores Website
The one (and only) thing the government has ever required the credit bureaus to do is give each person free access to their credit report, but only once per year.
To comply the three major credit bureaus setup a website called annualcreditreport.com. Note that the website is NOT called freecreditreport.com or anything like that. Those sites are for profit organizations looking to charge you for something you should get for free, or to sign you up for a costly credit monitoring subscription. Make sure you go to the right place.
Once you get there, you click a button that says “Request your free credit reports”.
You put in your information and then you get the opportunity to view one credit report for free, or all three credit reports for free.
If you are checking your credit report for a specific purpose, such as getting ready to buy a house, there may be some value in checking all three credit reports. However, in most cases, you will actually be better served by only getting one at a time.
When To Get Your Free Credit Reports
The only way to prevent fraudulent information from being on your credit report is to find it yourself. There is no one at either the credit bureau or at your creditors checking of verifying the information being placed there. I’ve had no less than two false entries on my credit report in the past five years. One was the same name, but not the same Social Security number, and another was based on a very old address I once had, but for neither my name or number, if you can believe that.
For actual credit disputes, it can be very difficult to get your credit report repaired. The process is completely skewed away from the consumer and there is nothing you can do about it. However, in some cases, like mine above, the creditor will be willing to correct the mistake. But, first you have to find the error.
To find errors on your credit report, you have to look at it. To look at it, you have to pay. (Still not fair, is it?) The exception is the once per year free look.
Many financial institutions will report your credit information to more than one credit bureau. In fact, most major banks and lenders report your information to all three credit bureaus. So, if false credit information ends up on one credit report, it likely will end up on all your credit reports. To monitor your credit effectively, then, you should pull each report at a different time.
If you divide out the year among three credit bureaus you should pull one report every four months. That gives you the best possible free coverage for the year. Put a reminder in your calendar to check on that schedule. You don’t get any extra reports if you wait more than a year, so get one every 12 months.
If you are married, some of your credit information will be reported on both of your credit reports. This is particularly true in the case of joint accounts.
Take advantage of this by staggering getting your credit report with your spouse’s credit reports. Alternate every two months which credit report you get. This gives you the maximum possible free credit report monitoring.
For example, if you pull the husband’s credit report in January, then you would pull his second credit report in May, and his third credit report in September. The wife, would then pull her first credit report in March, her second in July, and her third in November. Remember, the exact timing is not important as much as getting a good look at your credit every few months.
There are services that provide free credit monitoring for you, but nothing is as good as getting your own look at the actual source. Don’t get all three credit reports at once. The best thing is to get your credit reports at regular intervals.