Checking your credit report and score

Check your credit reports and scores for free three times a year.

Check your credit reports and scores for free three times a year.

How long has it been since you checked your credit report and score? If the answer is more than a few months, it’s time to do it again. That’s because your credit scores are more important than ever as a financial barometer in your life. Lenders look at credit reports and scores naturally, but so do insurance companies (which use it to determine, along with a cocktail of other factors, how much to charge you), employers (which tend to see it as a measure of whether you’ll be a responsible employee) and landlords (which use it to decide if you’ll be a decent tenant.)

In all the years I’ve been reporting on money, there’s been a lot of confusion over whether you can get your credit report and score free of charge. It’s a question I am asked fairly frequently, and the answer is: It’s easier now than ever to get free credit reports.

Here’s the deal: Because of the Fair and Accurate Credit Transactions Act, consumers are entitled to a free credit report once each year from each of the three credit agencies (TransUnion, Equifax, and Experian). If you’re doing the math, that means you can actually access your free credit reports and scores three times a year – once from each of the credit bureaus. You do that through the website annualcreditreport.com . And note: This website was put together by the bureaus for the specific purpose of giving you your credit report and score for free*.

Accessing your credit scores, however, is a bit more complicated. If a lender pulls your credit score and you’re denied credit or given an interest rate that is not the best available, that lender is required to send you information about how they made that decision – including the score used in the process. This is a new regulation, put into place by the Federal Reserve and the FTC in July of last year. You can also take advantage of a service that offers credit monitoring — there are many of these and they’ll generally give you a free credit score when you sign up. Just be careful: You have to cancel the monitoring within the trial period or you’ll start receiving a monthly bill. Finally, there are a few credit-oriented websites (Google them) that offer free credit scores that are similar to at least one of your FICO scores.

This can be a good place to start also. What are you looking for when you get this information? A few things.

First, your own data — free of errors. It’s not uncommon to find errors on credit reports. If you see any, use the website of the bureau that issued the report to dispute the information. They have 30 days to respond to your request.

Second, the absence of data that you know doesn’t belong to you. If random facts seem to be popping up, you could be a victim of identity theft. Immediately get in touch with the fraud departments of all three credit bureaus and put fraud alerts on your account. Then, again, start disputing the information. You’ll also want to file a police report; some of your financial institutions may ask for it.

Finally, you want to see a score that’s in the range of 720 or above. If you’re not there, work on improving your score — make sure you’re paying your bills on time, using only 10 to 30% of your available credit and not applying for any credit you don’t need.

*Please note that we are not responsible for the information contained on the listed website. The site is provided to you for informational purposes only.

Jean Chatzky

About Jean Chatzky

Jean Chatzky, the financial editor for NBC’s TODAY show, is an award-winning personal finance journalist, AARP’s personal finance ambassador, and a contributing editor for Fortune magazine. Jean is a best-selling author; her eighth and most recent book is Money Rules: The Simple Path to Lifelong Security. She believes knowing how to manage our money is one of the most important life skills for people at every age and has made it her mission to help simplify money matters, increasing financial literacy both now and for the future. In April 2013 Jean launched Jean Chatzky's Money School , a series of college-style, interactive online personal finance courses that give men and women across the country the opportunity to learn from and interact directly with her. Jean lives with her family in Westchester County, New York.
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