What's New at
AmeriChoice?

Have you ever wondered how to read a credit report from Equifax, Transunion, or Experian? Credit reports play a huge factor in determining your credit score and your ability to secure lending solutions at a reasonable rate. Despite their importance, 90% of the eligible population isn’t obtaining a free copy of their credit report each year. Why?

The three most common reasons are:

• They don’t see the importance of a credit report
• They don’t know how to access their credit report
• They are scared of what they’ll find on their credit report

We’re going to shed some light on the importance of your credit report, how you can easily access them for free, and what information is contained in the report.

What is a credit report?

The Consumer Financial Protection Bureau (CFPB) defines a credit report as “a statement that has information about your credit activity and current credit situation such as loan paying history and the status of your credit accounts.”

Your credit report is comprised of all of the financial information reported from lenders, creditors, and businesses to the three major credit bureaus. The three main bureaus are Equifax, Experian, and Transunion. Financial information is reported monthly to each bureau. As a result, your credit report will change on a monthly basis to accommodate the new information.

Why is it important to regularly read my credit report?

Since credit reports are a snapshot of your financial well-being, it’s vital to give them regular check-ups. In a Credit.com survey of those who checked their report,

• 21% found incorrect information
• 9% saw a late payment they weren’t aware of
• 10% discovered a previously unknown collections account

Since lenders and some employers use this information, you need to regularly check the report to make sure the information is correct. Incorrect information, and unknown collection accounts or late payments can negatively affect your credit score. Incorrect information can also be an indicator of identity theft.

How do I obtain a free copy of my credit report?

A federal law established in 2003 required the three main bureaus to create one, central resource for accessing free credit reports. This website is called AnnualCreditReport.com.

You are able to obtain a free copy of your credit report from each bureau one time a year. We recommend spreading out accessing the reports throughout the year. For example, once you obtain your copy from Equifax, wait four months before accessing the report from Experian. Lastly, you should obtain your copy from Transunion four months after Experian. This will allow you to check your credit report three times each year for free.

Despite this free resource, an estimated 26 million Americans are still obtaining their report through commercial credit monitoring agencies. Remember – you DON’T have to pay for this information. Use the free resource, AnnualCreditReport.com.

What information is included on a credit report?

Each major credit bureau formats their reports slightly different, but all will contain the same basic information. Look for the following content in your credit report, and make sure all information is correct. Knowing what information to expect will make it much easier to read your credit report, regardless of which bureau created it.

Personal Information

• Name(s)
• Current and previous addresses
• Employer
• Birth date
• Social security number
• Phone numbers

Key points:

• There may be multiple iterations of your name on the report, depending on what names you supplied to companies that report information to the bureaus
• If you see an address that you’ve never lived at on your report, it could be a sign of identity theft

Source

Financial Information

• Open accounts and loans
• Closed accounts within a certain time frame
• All account details
  • Name of creditor
  • Date the account opened
  • Credit limit
  • Account balance
  • Payment history for the past 24 months

Key points:

• Expect to see accounts for revolving debt, like credit cards, as well as installment debt like student or auto loans
• Closed accounts remain on your account for up to 10 years, depending on whether the account was delinquent or in good standing when it was closed

Source

Negative Information

• Any accounts in collections
• Public records (Bankruptcies, foreclosures, tax liens, civil suits, repossessions, etc.)
• Inquiries from credit or loan applications

Key points:

• If you see any accounts reported by a collections agency, try to settle these accounts as quickly as possible
• Repossessions and foreclosures will stay on your report for 7 years
• Bankruptcies will remain on your report for 10 years
• Recent changes to the reporting data will make it more difficult to include tax liens and civil suits on reports, which can actually help improve your credit score
• Only inquiries made in the past 24 months will be a part of your credit report
• Inquiries are not inherently negative, although too many in a short span of time can temporarily lower your credit score

Source

Personal Statement

This is an optional section of the report. The purpose of a personal statement is to further explain any negative information on the report to the bureau. Usually this won’t affect your credit score, but it can help detail the rationale behind any of the negative accounts.

What if I find incorrect information on my credit report?

If you find false information that could be hurting your credit score or be a sign of fraud, make sure to file a formal dispute with the credit bureau that issued the report. Each bureau now accepts online disputes. They will likely ask for identifying information to ensure that you are the correct owner of the credit report.

Use these links to access the specific steps each bureau requires for submitting disputes:

Equifax Disputes

Transunion Disputes

Experian Disputes

Subscribe to our blog for more helpful credit information

Use the Cents to Save blog as a free resource for financial tips and advice. Subscribe to receive regular updates from the blog and improve your financial situation. Enter your email now!