Maintaining a good credit history and having a good credit score is one of the most important aspects of overall financial health. Without a good credit score, a consumer will have a difficult time obtaining a loan, especially one with a favorable interest rate. Due to the importance of a credit score, it is important that everyone checks their credit report and score regularly. While the process can be complicated, there are various steps that can be followed to make it easier.
Order a Report through Credit Bureaus
The first step in checking your credit score and report is to order the report through the credit bureaus. There are three credit bureaus, Transunion, Equifax, and Experian, each which receive and analyze your credit data to determine a score. You should be able to obtain a credit report through each of the bureau’s websites.
All three of the bureaus are required to provide a consumer with a free credit report once per year. Since the three bureaus may not necessarily have received the same credit information, it is important to pull reports from all three of the bureaus periodically. If you are planning on applying for a major loan, such as a mortgage or auto loan, then you may want to order scores from all three of the bureaus.
While the bureaus are each required to provide a consumer with a free credit report at least once per year, getting a full credit score along with the report will require you to pay a fee. However, simply reviewing the report without a score should give you a good idea of where your score stands.
Review You Score
After you have received the credit report and score through one of the bureaus, the next step would be to review the score. The credit score should be located on the first page of the report, and will range from 350 to 850. Generally speaking, having a score of 720 or more is considered good, although to get the best rates on mortgages and other forms of credit, you may need a score of 750 or more. If you have ordered scores from multiple bureaus, the score may fluctuate a bit, but should be within 10 points of each other. If there is a large disparity in scores, then one bureau must have a piece of information that the others do not, and the cause of the disparity must be determined.
Review For Accuracy
After you have checked the credit score on the report, the next step would be to carefully review the report for accuracy. You should carefully read through each account listed on your report to ensure that you actually opened and use the account. Many people may find that there are unknown accounts on their report, which may have been listed incorrectly or possibly opened fraudulently.
You should also review each of your credit accounts to determine that the account balance and account limit are listed correctly. Your credit limit utilization is one of the most important aspects of your credit score, so if your credit limit is listed too low or your account balance is listed too high, your credit score could be negatively impacted. Keep in mind that it may take a creditor 30 or more days to report updated information to the credit bureau, so if you recently paid down your balance or received a limit increase, your report may not reflect it
Third, you should review your payment history to determine its accuracy. Payment history is the largest component of your credit score so it is quite important to check the accuracy of the payment history reported by each creditor. The payment history should reflect whether or not your payments for the past five years were made on time, or were late.
Contact Creditor
After reviewing your credit report and score for accuracies, the next step would be to contact the creditors to discuss any inaccuracies that you found. Listed on the credit report should be a list of contact numbers for each of the creditors. When you call the creditors be sure to have a copy of your credit report available and any other reference material which may help you explain your concern.
After discussing the inaccuracies with the creditor, the creditor may ask you to submit some information which could include a copy of a check you sent in to make payment or a copy of your most recent bill. Once the creditor has reviewed your case, you should receive email confirmation that the inaccuracies will be removed from your report. However, this process at times can take over a month, so for expedited service it would be important to follow up with the creditor at least once per week.
Once the creditor has stated that the inaccuracy will be removed from the report, you will need to re-check the report to ensure that it has been removed. Keep in mind that it could take up to 30 days for the correction to be made. If it has not been removed at this point, continue to follow up with the creditor until it is completed.
