The Truth About Credit Reports: What Are They & How to Get Them for Free

The Truth About Credit Reports: What Are They & How to Get Them for Free

Having good credit is essential to a healthy financial life and to ensuring that you’re able to do things you want to do such as purchase a vehicle or house, or even get a cell phone contract.

Many people aren’t aware of what their credit score is, how it’s determined, or how to improve their credit score if it’s not where they’d like it to be. In this article, we look at the credit report, which is where you go to find out everything you need to know about your credit and to see what lenders see when they consider lending you money.

What is a Credit Report?

A credit report is a document that details your credit history, activity, and your current state of ‘creditworthiness.’ Because multiple agencies report on your credit, most people have more than one credit report. These reports contain information such as your payment history, how much you owe, and your general financial history. In the United States, there are three reporting agencies: Equifax, Experian, and TransUnion.

The importance of the credit report is that it’s used by lenders and companies who decide whether you’re an acceptable risk to lend money, extend credit, or offer a contract to. And, it’s not just banks who use credit reports; it’s companies like cell phone providers, cable companies, and utility companies who look at the information and decide whether to provide you with their product or service based on the information therein.

Most credit reports contain the following information:

  • Your personal data such as your name, address, date of birth, social security number, and your phone number.
  • Credit accounts, including mortgages, vehicle loans, credit cards, and store cards. This information also includes your balances for each account, your payment history, the date the account was opened or closed, and your credit limit.
  • Also included in the credit reports are incidents such as bankruptcies, foreclosures, credit inquiries, and liens.

As you can see, your credit report contains quite a bit of information about your financial and credit health, which is why it’s vital you know what’s in it so you can improve areas that are bringing you down or dispute items that are in error.

How Often is it Updated?

In general, your credit report is updated every 30 to 45 days, and upon getting updated, your credit score will reflect any changes very quickly. Keep in mind that while most creditors report to the agencies every month, they may report at different times of the month and may not report to all three credit bureaus. So, while your score and information may be decent in one report, it may not be so good in another if they both don’t have the same information; that’s why it’s essential to get your credit report from all three bureaus to get an accurate picture of where you stand in relation to credit.

If you’re worried about your credit score, remember, these scores are usually calculated when a lender requests that information. The score you get when you request your credit score depends on which company was used to score your credit, which bureau supplied the data, and what your score will be used for, such as a loan. If your score isn’t where you’d like it to be, you can take measures to put it in the right direction and see results quickly if you work hard.

what is a credit report

Which Report is the Most Accurate?

Since all credit bureaus have to follow the same laws, it’s not prudent to say which one is the best or most accurate. While these companies are for-profit businesses and do compete with one another, there isn’t an advantage for one to ‘skew’ your credit one way or the other. Also, keep in mind that you won’t know which agent your creditor will check when you’re applying for a loan or credit; and while your credit may look pretty good on one report, it may not be so hot on another. Keeping track of your credit report from each agency is key to getting a good picture of your credit health and staying on top of issues that could drag down your score. And, because errors on one report don’t necessarily make it onto all three, it’s essential to look at all of them to make sure all of your information is accurate.

How to get a Free Credit Report

According to the FTC, everyone is entitled to get one free copy of their credit report every 12 months from each of the major credit reporting agencies thanks to the Fair and Accurate Credit Transactions Act of 2003. You can go online to get your report at annualcreditreport.com or by calling 1-877-322-8228. Free credit reports are also available by checking Credit Karma or Credit Sesame.

You’re required to give them your name, address, social security number, and DOB to make sure you are who you say you are.

There are other situations in which you can get another free credit report such as if you’re unemployed and will begin looking for a job soon, if you’re on welfare, if you’ve been a victim of identity theft and have errors on your credit report because of it, and if you’ve been denied credit because of information contained in your report.

To find out where you stand in regards to your credit it’s essential you get a copy of your credit report every year; it’s free, and this report plays a huge role in your ability to use capital to improve your life or make large purchases.

Also, reviewing your credit report as you would your bank statement allows you to find out if there is any misinformation that could be dragging your credit score down or keeping you from getting credit. Finally, information on a credit report is often the first sign that someone has been a victim of identity theft.

If you need help deciphering your credit report, or assistance in rebuilding your credit score, contact credit repair attorneys today!

 

 

3 Most Common Questions That Credit Repair Companies Get Asked

3 Most Common Questions That Credit Repair Companies Get Asked

Your credit score determines a lot of things in life. A poor credit score can keep you from securing an auto loan, being eligible for an apartment lease. It can also determine the interest rate on any credit card that you apply for. That is why having a good credit score is so important, but how can you get a good credit score if you currently have a bad one?

Credit issues are sometimes complicated, and improving one’s credit score can be a very time-consuming endeavor, which is why many people opt to hire professionals to assist in improving their credit scores. These professionals are employees of credit repair companies.

A credit repair company is a business entity that offers to improve the client’s credit in exchange for payment. You can hire these active companies to raise your credit score. Once you hire one, they typically go about improving your score by first requesting your credit report from each of the three major credit bureaus.

They look for derogatory marks such as charge-offs, bankruptcies, and tax liens. They also look for possible errors in your report that could be negatively affecting your score. Then they usually petition for these marks to be dropped off your record or negotiate with the creditors to make your report more favorable.

Once they have done everything they could on their end to amend your credit report, a good credit repair company will then work with you directly to devise a financial plan that will keep you on the right path towards better credit. There are a lot of essential questions that get asked of these companies during this process, which include:

How Long Will it Take to See an Improvement in my Credit?

Most people have specific plans and goals which is why they reach out to credit repair companies in the first place so questions often get asked about how long it will take a company to improve one’s credit.

The length of time it will vary greatly depending on the situation, but there are usually simple steps that can be taken that make an immediate improvement. A credit repair company can request certain frivolous marks against your credit be removed, and creditors will usually comply with these requests. So a good credit repair company can make a slight improvement in as little as a month.

If a request for an investigation is made on the client’s behalf, the reporting bureau has 30 days to complete the investigation to determine if any mark should be stricken or sustained. Of course, the bureau has the right to review and deny any request for an inquiry if they deem it to be dubious.

Sometimes though it is not as simple as sending out a letter and improving a client’s credit can take up to a year. This usually happens when litigation must be involved to dispute fraudulent reports from crediting entities.

credit repair company

Do you Offer A Money Back Guarantee?

What if a client’s credit cannot be improved? There are certainly cases that can’t be helped so what if you hire a credit repair company and they can do nothing for you? These situations are why so many companies hear questions about a money-back guarantee.

The truth of the matter is that most reputable credit repair companies will not ask for money upfront. The credit repair industry is rife with scams, and one of the most telling signs that you are dealing with an illegitimate organization is if they ask for money before any services are rendered.

On the flipside, almost all respectable credit repair companies will not charge you if they could not improve your credit score and they will never guarantee results. They will usually offer a free initial consultation wherein they will assess your situation and how they might be able to help. Or not.

What Kind of Information will I need to Provide?

The reason people opt to work with credit repair agencies is there is usually a lot of confusing red tape, and the process takes a lot of time. So one concern that is often expressed relates to how much of the client’s time will need to be committed to the process and what kind of information or documents they will need to produce.

Most companies will request things like a list of current debts, payment histories for existing obligations, and if possible, the client’s credit utilization rate. This will involve gathering some documents and also giving the company access to any credit monitoring software that the client uses.

Hiring a credit repair company will usually mean a correspondence will open up between the company and creditors and the credit bureaus. All correspondence letters are sent to the client’s address, and they will need to either physically give copies of these letters to the company or send them digital copies.

There is no improving your credit without being directly involved in the process and carving out at least a little time to work with whatever company you hire so you should avoid any company that says they will take care of everything for you as they are probably trying to scam you.