Are you not satisfied with your present score? If yes, then you should order and
monitor your credit reports to find out what went wrong. As per FCRA (Fair Credit Reporting Act), youre entitled to get a free copy of a credit report annually from each of the 3 major credit bureaus, namely, Experian, Equifax and TransUnion.
Credit reportWhat it is
A credit report can be defined as a detailed account of how youve managed your credit. Anyone, who wants to offer you a loan, checks your credit report/reports to decide how responsibly you can handle a credit. So, to some extent, your reports decide your future lifestyle. This is because when you apply for a loan, the lenders check your creditworthiness in order to decide whether or not to grant your loan request. Besides granting your loan request, you can take out a loan with comparatively low interest rate if you have a good score.
Why to check reports at regular intervals
You should always order and monitor your credit reports at regular intervals to check whether or not there is any inaccurate information in your reports. Make sure you check reports from the 3 major credit bureaus as not all creditors report to each of the bureaus. By checking the reports, youll also come to know whether or not the account status has been rightly updated after youve paid off your debts. If you find any inaccurate information, you should immediately dispute it by writing a letter (along with sufficient evidence) to the credit bureau.
Information contained in the credit reports
Each of your credit reports contain some basic information, which are given below. Every time you order your reports, check whether or not these information are accurate.
Payment history:As already stated, credit reports contain payment history. So, the type of credit accounts (such as, credit card, mortgage, etc.) along with the date you opened them are mentioned in your reports. It is also mentioned how much youve taken out and whether or not youve paid on time.
Personal identifying information:Your credit reports contain personal information, such as, your name, address, your Social Security Number, date of birth along with information regarding employment.
Credit inquiries:The credit reporting agencies maintain a record of all creditors whove pulled out your reports in the past 1 year. The reports also contain a list of businesses and persons whove requested for your credit history for the purpose of employment.
Apart from above, some public records are also mentioned in credit reports, such as, foreclosures, bankruptcies, liens, judgments, etc.
Based on your credit report, each of the 3 major credit bureaus assigns you a number, which is referred to as a credit score. Usually, the number ranges from 300-850 and you get a score from each of the 3 credit reports. The bureaus use FICO scoring model to calculate your credit score. You may need to repair your credit record and improve your score if necessary.
