September 29th, 2016 6:41 PM by Dana Bain
Did you know that
your purchasing and payment habits are tracked by your bank, credit card
companies, department stores, and other creditors and reported to credit
bureaus so potential lenders can decide whether they want to take the risk of
lending you money or issuing you credit? These bureaus also collect such
information as your job history and whether you own your home. The better you
understand your credit report and score,
the better chance you have of leveraging your credit to secure financing for
Why is it
important to know what's on your credit report?
For one thing, if
you're thinking about buying a house or applying for credit for any other big
purchase, you'll need a clean credit report, and it's always best to know
what's on it before your lender does. This will give you an opportunity to
clean up any discrepancies or errors, which are fairly common, and which can
throw a monkey wrench in the works if not resolved.
should check your credit report with each of the three credit bureaus, Equifax,
once a year or so. You're entitled by law to one free copy of your credit
report from each of these three credit bureaus once a year. You can get all
three at once or you can spread them out over the year. If you order copies
more frequently than that, each report will cost around $10 and in some states
considerably less. You can also opt to order a three credit bureau report,
usually under $40, that will list your credit report and score for all three
agencies on a single report.
If you've been
turned down for credit in the last 60 days because of something a lender saw on
your credit report, you can obtain a copy of your report free of charge.
Lenders are required by law to notify you of this right if they deny you
When you get your
credit reports, review them carefully to make sure all the loans and credit
accounts listed really belong to you, and that all the accounts listed as open
are actually current loans or balances.
If a loan you've
paid off or a credit card that was cancelled is still listed as open, contact
the credit bureau and ask for your report to be corrected.
Usually the credit
report you obtain from the credit bureau will include a form for reporting any
inaccuracies. If you requested an online version or credit report, most
agencies have a dispute center where you can submit your request online to dispute credit report errors. Give as much detail
as possible. If you have documents that back up your claim, provide copies. By
law, the credit bureau must investigate your claim. However, even if they
decide your report is accurate as it stands, you should continue to try to correct
the report by writing a letter explaining your side of the story (not to exceed
100 words), which the bureau is required to provide to anyone requesting your