Free Credit Reports

You may have heard that you can get a free credit report online. Actually you can get a total of 3 reports, 1 from each major credit bureau, once a year.

Beyond that, there’s confusion. How do you get these reports? Can you get them on any website? Do you have to pay for your credit scores? (Yes.) TheCreditTruth.org was created to help consumers through the credit maze.

If you have credit, there's a credit report about you somewhere. Credit reports are detailed records of your financial history going back decades. Your credit report is an ever changing document that updates every 30-60 days. It's used by lenders to help decide if you're worthy of credit.

Three credit bureaus -TransUnion, Equifax, and Experian - collect, maintain and distribute credit information about you. For a fee, they will provide your report to everyone from potential landlords to VISA.

Because of your credit report's sensitive financial nature, Congress gave you the right to 1 free credit report yearly from each of the three credit reporting agencies (2003). This allows you to review your reports for errors which might prevent you from receiving credit.

Your free credit report includes:

  • Personal information (legal name, alias names, addresses, current and previous employers, date of birth)
  • Credit report summary (current and past credit status, total number of open and closed accounts, balances of accounts, historic high balances, if accounts are current or delinquent)
  • Public records (bankruptcy records, government court records, liens, judgments, and child support records)
  • Credit inquires (a record of everyone who has requested your report in the last 2 years)
  • Detailed credit history (up-to-date information about your loan payments, credit card debt and payment history)

Ordering your free credit report

Under the Fair and Accurate Credit Transaction Act of 2003 (FACTA), all consumers are entitled to 1 free credit report from each credit bureau every 12 months. The program was phased in across the 50 states and concluded in late 2005. To keep things simple, one centralized website was created to handle the new requests: www.annualcreditreport.com. Despite the number of credit report offers you see online, this is the only official site.

You can get free credit reports from this site in one of the three ways:

  • Request free credit reports online at www.annualcreditreport.com
  • Request your free credit report by calling 1-877-322-8228
  • Request your free credit report by mail

To request your free credit report by mail, fill out the request form and mail it to:

Annual Credit Report Request Service
P.O. Box 105281
Atlanta, GA 30348-5281

Keep in mind that while you are entitled to a free credit report, you'll have to pay to see your credit score. Credit scores have never been free. Through annualcreditreport.com, the rate is around $5 a score. Back To Top

When to order

People use different strategies:

  • Order all 3 free credit reports at once
  • Check 1 report every 4 months, which lets you keep an eye on credit throughout the year

If you haven't ever checked your reports it's a good idea to begin by ordering all 3. Later you can use the staggered method of checking reports year round. Make sure you keep track of when you viewed each bureau report. Every 365 days, you can log in and get a new one. Back To Top

Ordering online

When ordering your credit report online, expect to spend about 10-15 minutes per report to go through the validation process unless it's a service which provides them all at once. In that case you'll only enter your information once.

Steps:
  1. Enter your personal information online
  2. Answer questions that validate identity, which may include account numbers and mother's maiden name
  3. Pass into a secure (SSL) area of the provider's website where you can view and print your credit report safely Back To Top

3-in-1 Credit Reports

You may have seen this offer online. The 3-in-1 report offers just what it says - views of your file from TransUnion, Equifax and Experian along with all 3 credit scores. Instead of the separate credit reports you receive from annualcreditreport.com, this report offers a side by side format so it's easy to read and compare. Some sites offer it for a one-time fee ($29.95) Others give the report free with each trial of credit monitoring service. Some people prefer this method as it's faster than the official site. Back To Top

Extra free credit reports

You're entitled to additional free reports in these situations:

  • If you have been denied credit (you must request a copy within 60 days)
  • If you are unemployed and intend to apply for employment in the next 60 days
  • If you are on public welfare assistance
  • If you have reason to believe your file contains inaccurate information due to fraud or identity theft
  • If an adverse decision related to your employment has been made based in part on information contained in your credit report
  • If your credit report has been revised based upon an investigation at your request

7 states give residents the ability to always obtain credit reports free of charge. This is in addition to the free annual credit reports available nationwide through the FACT Act. These states are: Colorado, Georgia (2 per year), Maine, Maryland, Massachusetts, New Jersey and Vermont. Back To Top

How often to check

At a minimum, you should check your credit report on a yearly basis. Since identity theft is on the rise and accounts for 4-6% of all credit fraud, you can't be too safe. If you're working on your credit, going through a divorce, recovering from theft, or want to be proactive about protecting your credit, check into a credit monitoring service which gives you unlimited year round access to your credit reports. Back To Top

Spotting what's wrong

Look for discrepancies, wrong information and things that don't make sense.

  • Make sure that you recognize all the accounts listed.
  • Crosscheck between all the different credit reports to ensure that the account numbers match, as well as the status.
  • It's important that your name, address, and employment history are all correct.
  • Make sure a relative's credit history is not being reported as yours.

Your credit report contains a lot of information that may seem hard to digest. Terms like charge-offs, inquiries, and R1's are not exactly consumer friendly. Let's look at the basic make-up of a credit report. A credit report is divided into four sections:

  1. Personal information
    This section contains identifying information: your name, current and previous addresses, social security numbers for you and your spouse (if applicable), as well as current and previous employers.

    Name misspellings are common and as long as the information reported is correct, it's not a big deal. A misspelled name with strange information, however, is a warning sign.
  2. Credit report history
    This section contains all open and closed accounts of past and present loans, credit cards, mortgages, and other lines of credit from banks, retailers, and other lenders. Sometimes individual accounts listed here are called trade lines.

    Each account will include the name of the creditor and the account number (it may be abbreviated for security). Some creditors may have more than one account on you - for instance, if you move, they may transfer your account to a new location and assign a new account number. Account entries will include:
    • Status as open, inactive, closed, paid, charge-off (the creditor has written your account off and taken a loss)
    • Date account was opened
    • Type of credit. Installment, such as a mortgage or car loan, or revolving, such as a credit card
    • Names involved with the account (yours or joint account with your spouse)
    • Total amount of the loan, high credit limit or highest balance
    • How much you still owe
    • Fixed monthly payments or minimum monthly amount
    • Payments made on the account
  4. You may see payment codes ranging from 1 to 9. An R1 or I1 on a credit report is an indication of a good payment history on a revolving or installment account. An R9 or I9 is the worst rating you can get - it shows that no payments or attempts of making future payments are foreseeable.
  1. Public record information
    Most lenders will tell you that this section of your credit report should be blank. It lists items of public record such as bankruptcies, foreclosures, monetary judgments and tax liens. Any of these can torpedo your credit score.
  2. Inquiries
    This section contains the names of anyone who has asked to see your credit report recently. "Hard" inquiries are ones you initiate by filling out a credit application; "Soft" inquiries are from companies that want to send out promotional mailings to a pre-qualified group. Soft inquiries have no bearing or negative impact on your credit report or score.

Important: Whenever you read your free credit report, always look it over for accuracy. If you find a mistake on your credit report you'll need to resolve the matter in writing. Back To Top

Fixing report errors

If you find wrong information - more common than you might think, up to 79% of free credit reports have errors - report it to the credit bureau. The bureau must open an investigation and confirm the information is correct with the reporting creditor.

Yes, 79% of credit reports contain errors! That's according to a 2004 study by U.S. Public Interest Research Group (PIRG). With numbers like that, viewing your report is mandatory. It is up to you to find and report any errors to the credit reporting agency and the merchant that reported the error. If you're unsuccessful with one, try the other.

Minor errors can often be corrected over the phone. If this is unsuccessful, the dispute must be done in writing, either online or by mail.

Follow these steps:

  • Send the credit reporting bureau a brief letter (view example letter) describing the error, and include a copy of your credit report with the error highlighted or circled.
  • Include any documentation you have that proves your position (for example, an account statement that shows you paid in full when your report claims you're delinquent).
  • Include your full name, date of birth, social security number, mailing address, the name of the creditor you have a dispute with, and your reason for the dispute.
  • Send the letter by certified mail and keep a copy.

By law, the credit reporting bureaus are required to investigate. The process typically takes 30 to 60 days to complete. If it goes longer than that, the bureau will generally remove the information. Back To Top

Removing closed accounts

Information is added to your credit report all the time. Removing information is a much slower process. Many closed accounts remain on your credit report indefinitely. As long as they show a zero balance and note that 'consumer closed account' they aren't a problem. Credit bureaus can only legally show certain negative information for 7 years. If a closed account that is negative remains on your report longer than 7 years, request its removal. Back To Top

Checking report dangers

It's a rumor that requesting your own free credit report will affect your credit rating or credit score. Inquiries such as loan and credit card applications will affect your score if there are several in a relatively short time frame. If you are comparing rates for mortgages, car loans or insurance, and a variety of lenders pull your report, it typically has no negative effect.

Who can view reports

It used to be that only companies in the credit industry saw your report. Now everyone from insurers to cell phone companies may be examining your credit report. The Wall Street Journal reported in 2004 that Texas's TXU Energy unfairly discriminated against customers with the lowest credit scores by charging them more.

No one can access your credit report without your consent. However consent is implied when you fill out a credit application or other form to open a new account. Credit bureaus can provide information to the following requestors:

  • Creditors who are considering granting or have granted you credit
  • Employers considering you for employment, promotion, reassignment, or retention
  • Insurers considering you for an insurance policy or reviewing an existing policy
  • Government agencies reviewing your financial status or government benefits
  • Anyone else with a legitimate business need for the information, such as a potential landlord Back To Top

Why to check frequently

You are more likely to notice problems and inconsistencies if you check your free credit report on a regular basis. If you notice anything odd or anything you don't recognize (such as a charge account you did not open) report it immediately.

Sometimes, these errors are caused by mistakes made at the credit reporting bureau, but they could be an indication that someone is using your identity (see Identity Theft and How to Avoid It). In either case, such mistakes could hurt your credit score.

Why you should check or monitor your free credit report regularly:

  • Your credit report and score are used to make decisions about loans, interest rates, even employment
  • If your credit score drops - you need to find out why and begin measures to improve it
  • Inaccurate information can hurt your credit score - so you should continuously verify the accuracy of your credit report as it's constantly changing
  • Activity in your file, which you did not initiate, can be an early warning sign of identity theft.

Remember, if someone gets your social security number, it only takes a few additional pieces of information, quite easily obtained, to assume your identity. The Internet makes it easier than ever because most of this information the criminal needs is out there.

TIP:
Credit bureaus are not required to inform you if someone else is using same social security number. Check for odd activity under your name or a variation in spelling; it may be your only hint that someone else is using your identity. Back To Top

Important contact information

Remember you must go to the official credit bureau site www.annualcreditreport.com to obtain your free credit report. If you contact the bureaus directly for a free report, you will be charged a fee. For assistance disputing an item on your report or for questions, contact the bureaus directly:

Trans Union
P.O. Box 1000
Chester, PA 19022
1-800-888-4213
TransUnion.com

Equifax
P.O. Box 740241
Atlanta, GA 30374
1-800-685-1111
Equifax.com

Experian
P.O. Box 2002
Allen, TX 75013
1 888 397 3742
Experian.com

In your financial life, few things figure as prominently as your credit report and credit score. Learning the basics of the credit report process, and keeping your credit report free of errors, is essential to good financial health. You should focus on improving your credit score as the highest credit scores receive the best interest rates and loan terms. On a mortgage, a difference of 100 points could be worth hundreds of dollars each month.

Since 2005, all Americans have the legal right to obtain a free annual copy of their credit report from TransUnion, Equifax and Experian credit reporting bureaus. This law is intended to help consumers reduce errors in their credit reports by minimizing the obstacles to viewing credit reports. To receive a free credit report visit the official site run by the bureaus: annualcreditreport.com

Your personal credit score is a number from 350-800 which stands for your credit risk. The higher numbers are considered less likely to default. Credit scores come from mathematical formulas that measure many variables in your credit report such as payment history, public records, and debt to income ratio.

The Fair and Accurate Credit Transaction Act (2003) amendment to the FCRA Fair Credit Reporting Act guaranteed all Americans the right to see their credit report once a year to check it for errors. To learn more about free credit, credit scores and financial terminology, visit our glossary page.