Managing Debt: Understand Your Credit Report

You've heard plenty about the importance of managing debt, and improving your credit score. What about your credit report? Three major credit reporting corporations, Equifax, Experian, and TransUnion, maintain credit data for up to ten years. As time passes, old information drops off of your credit reports and is replaced by new information.

Your Credit Report: A Condensed Biography

Credit reports, also called consumer reports, contain information about where you've lived, schools you have attended, degrees and certificates earned, bank/credit accounts, and legal/public information. Credit bureaus, including Fair Isaac Corporation (FICO), have proprietary systems for assigning credit scores based on the account information contained in each of your three credit reports.

• You're entitled to one free copy of a credit report from each of the three credit reporting agencies once a year. Credit scores are not included with free credit reports, but can be obtained for an additional fee. You can order credit reports and credit scores here.


• Accounts are shown from most recent to oldest: It's important to read through your credit report from front to back. Make sure that information shown for each account is correct, including the active status. If you've closed accounts, make sure that this is shown on your credit report.


• Names of financial institutions can change: Verify account numbers for each account, as issuer names can change due to mergers or the transfer of your accounts. If you find accounts that don't match either the name or account number, this could be a reporting error--or a sign of fraud or identity theft.


• You must authorize access to your credit report: Before accessing your credit reports, any organization wishing to view your credit report must ask you to sign a release authorizing access to your credit information.


• Credit inquiries also show up on your report.
  Each time someone accesses your credit report, it counts as an inquiry. Although you may have heard that each inquiry on your credit report can lower your credit score, this is not always true. Only inquiries resulting from your applications for credit are counted toward your credit score.

In addition to potential creditors, employers and landlords may check your credit report; make sure you verify ahead of time that all information contained on your credit reports is accurate. It's best to address bad credit concerns directly rather than trying to hide them.

Source:
My FICO Website: What's in Your Credit Report

About the Author:
Karen Lawson started writing stories about birds and surfing at an early age. For more than ten years, she enjoyed a productive corporate career in mortgage banking before moving to Reno, Nevada in 1997. Karen earned BA and MA degrees in English (specializing in writing) at the University of Nevada. Significant areas of research and writing include truth and ethics in creative nonfiction, medical humanities, and the symbolism and lore of birds in American literature and culture. Karen has taught English at a community college, is writing a collection of poetry, and enjoys birdwatching and walking her basset hounds.