MoneyDo: Get Familiar With Your Credit Report

We’ve always recommended that folks review their credit report annually to understand what’s on it and how it affects your score.

Now more than ever, it’s critical to know where you can get a copy of your credit report and what is on it. The need and  importance of being familiar with your credit report continues to intensify as more companies continue to report data breaches. That’s why this week’s MoneyDo is: Get familiar with your credit report.

A few critical points:

  • Massive breaches at Equifax and Capital One means it’s extremely likely you or someone close to you had their data stolen.
  • The information stolen will affect people of all income groups. Someone could open an account with your information, start a new life, or file taxes in your name.

Why is it important that you look at your credit report?

  • Your credit report, and by association your score, has a large impact on your cost of credit and other aspects of your life.
  • Your score becomes the benchmark that banks and lenders use to determine what your interest rate is or whether you even qualify, therefore they frequently request your information.
  • There are three credit reporting agencies; Experian, Transunion and Equifax. Each reporting agency uses different metrics to monitor and report on your credit.
  • If you’re in the process of applying for a loan or opening a credit card, those companies are requesting your credit from one of the three reporting agencies.
  • It’s important, given recent events, that you also look at who is requesting your credit.
  • Every time someone requests your credit, the agencies make notes of it. When you request your credit-report you’ll be able to see when and who requested access to your credit.
  • A common tactic by criminals is to REOPEN an existing card or credit line.

How can I find out what’s on my credit report?

Monitoring your credit creates self-awareness of credit issues and can be useful in detecting fraud. We suggest monitoring your credit every few months. The Fair Credit Reporting Act (FCRA) requires that each of the nationwide credit reporting companies (Equifax, Experian and TransUnion) must provide you with a free credit report – not just your score – once every 12 months. Therefore, in a one-year period you would be able to receive three reports, once from each reporting company. A centralized site has been created to request your copy:

Further, we suggest freezing your credit, which prevents companies from requesting a copy of your credit bureau report unless you have specifically authorized them to do so. Freezing your credit prevents a fraudulent actor from opening a loan in your name. You’ll need to go to each provider to freeze your credit.
• Equifax offers Lock & Alert™ for free.
• TransUnion offers credit locks through a free service as well as through paid products.
• Experian offers credit locks through a paid monthly service.
Follow these steps and you will minimize your risk of becoming a victim of identity theft.