Guest Contributor – Tara Goodfellow, MBA
Mrs. Tara Goodfellow owns Athena Educational Consultants, Inc. a career consulting company that provides individual career related services such as professional cover letters and resumes, interviewing skills & mock interviews, networking & job search strategies, and career assessments.
Know Your Money
Monday – November 14, 2016
(First published September 15, 2014)
Check Your Credit Report
By Guest Contributor Tara Goodfellow, MBA, Owner Athena Educational Consultants, Inc.
Take advantage of your right to order a credit report one time per twelve months from each of the three national credit agencies: Equifax, TransUnion and Experian. To obtain the truly free reports, be sure to use Credit Karma or annualcreditreport.com. There are several other websites that state it’s free, but there are typically strings attached. You can get your free credit report and helpful credit information at Credit Karma. You may also log on to annualcreditreport.com, select your state from the drop down menu, and provide detailed and personal information, and select from which credit agency you’d like your report.
When is a credit report used?
Typically, when you apply for credit, your credit report will be ordered and reviewed. In summary, this tells the potential lender your level of risk. This is usually reviewed when you apply for a car loan, a cell phone, or a retail credit card to name a few. If you are not familiar with what is on it, you may be getting denied for reasons that aren’t accurate.
What can I expect to find on my credit report?
A credit report is basically detailed credit history. It lists your bill payment and loan repayment history, the amount of credit you have available, your monthly debts, late bill payments, and other types of related information. The information helps lenders determine whether you are a good or bad credit risk.
How does my credit report differ from my credit score?
A credit score is one number that ranges from 300-850. The most widely used model is based on a mathematical model created by Fair, Isaac and Company, and referred to as your FICO score. It basically ranks your credit risk. The number is based on a formula that analyzes your credit file information showing your payment history. It’s a tool used by lenders to decide whether a person qualifies for a particular credit card, loan, or service. Basically, how risky will it be for them to lend you money or credit? What is the probability you’ll repay what’s owed to them over time? In general, the higher the score, the less risk.
Should I just order all three reports at once?
You can, and this might make sense if there’s a reason you want to compare all three. However, if you decide to space it out a bit, you can make note of any changes without having to wait a full twelve months to notice additional or changed information. Let’s say you order one today. Go ahead and make a note of the date four months from now, and order from one of the other two agencies, and proceed with that pattern.
What if I find something that’s incorrect?
The process is pretty simple. If you believe something isn’t correct, notify the agency directly. These options are available on each of the three main websites for TransUnion, Equifax, and Experian. Literally, the agencies make billions of updates monthly, so it is important to review each detail on your report and let them know immediately if something needs to be reviewed. You’ll be notified typically within 30-45 days with an update. Or, if you dispute online, you can check your dispute status electronically.
I need to improve my credit report, should I respond to one of the emails I receive about promising to improve my score?
The short answer, NO. There’s a really good chance either you’re going to be charged a great deal of money to have an “expert” company do what can be done for free, and/or the company is not reputable. If you do need help with your credit score, contact a nonprofit agency. One listed on Equifax’s website is Money Management International (MMI).
Since I don’t have much credit, I heard I should open lots of credit card accounts. Is this true?
It’s sometimes advised if you don’t have an extensive credit history, to open a FEW new accounts to establish credit. However, the keys to this are to pay them off on time. Do not open accounts just for the sake of having accounts, and if you’re not responsible with funds, this can backfire terribly. Even your student loans can help establish credit if paid on a timely manner.
Want to stop getting all of those “you’ve been pre-approved” offers?
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