If you apply for a loan, a credit card, a mortgage, an apartment or even a job, the lender, apartment manager or employer will probably screen you by looking at your credit report. The information it contains might determine whether you get the loan and its interest rate, the apartment or the job. Your credit report is one way people determine how financially responsible you are.
Q: What’s in your credit report?
A: Your credit report contains your name, birth date, Social Security number, where you work, your spouse’s name, your employment history, whether you own a home, your income, whether you’ve been arrested or sued, and whether you ever filed for bankruptcy. Good information in your report makes it easier for you to get loans and low interest rates. Bad information, such as a sketchy payment history or being maxed out on all your credit cards, means you might not be able to get a loan at all or, if you do, you might have to pay a high interest rate.
Q: Can you view your credit report?
A: Once a year, you can get a free copy of your credit report from each of the three major credit bureaus — Experian, TransUnion and Equifax — by contacting AnnualCreditReport.com. When you get your report, look it over to ensure the information listed is correct. If you find a mistake, notify the credit bureau in writing. In the credit report world, you’re guilty until you prove your innocence.
Q: What do you need to get your credit report?
A: You need to provide your name, address, Social Security number and your date of birth to get a copy of your credit report. The credit bureau may also ask you questions that only you would know how to answer, such as how much your mortgage payment is. Credit bureaus never contact you by telephone or email asking for personal information.
Q: How can you improve your credit report?
A: The best ways to improve your credit report are to pay your bills on time, limit the amount of outstanding credit you have and resolve any bill disputes. Michael Feldman of MortgageIT.com once said that you sometimes have to “throw your principles out the window” to save yourself money. He gave the example of someone who questions owing a doctor $100. Feldman said to pay the bill because it saves you thousands of dollars by keeping your credit report clean.
Q: How long does information remain on your credit report?
A: Information in your credit report remains for seven years; most bankruptcies remain for 10 years. Even if you pay off a judgment, for example, it remains on your report until its seven years are up. Paying it won’t make it automatically and immediately disappear.
Q: What if you find a mistake on your credit report?
A: Credit reports often contain mistakes. If you find a mistake on yours, contact the credit bureau in writing. Explain what the mistake is, and provide proof to support your claim. (You cannot get accurate information taken off your credit report.) The credit bureau has to investigate your claim unless your claim has no validity. After the credit bureau completes the investigation, it must give you a written report of the results. If the agency did make a mistake, you can request that the agency send correction notices to anyone who received your report that contained the error within the last six months.