The Smart Student's Guide to Credit Reports

Your credit report is somewhat like a report card. It’s based on your past performance, and everyone who views it will take away an immediate impression of you. They can judge whether or not you seem like a reliable individual who is dependable enough to loan money to, and who can be counted on to repay your debts.

What is in a credit report?

A credit report contains information about where you live, whether you’ve been sued or arrested, your employment history, and if you have filed for bankruptcy. Your credit report shows a history of your debt and how much of it you have repaid. There are three nationwide consumer reporting agencies that collect and report on the information detailed in your credit history: Experian, Equifax, and TransUnion.

How do I get a copy of my credit report?

You are entitled to one free copy of your credit report every year from each of the three credit reporting agencies. The three agencies established a central point for accessing your credit report, at www.annualcreditreport.com, 1-877-322-8228, or by completing the Annual Credit Report Request Form and mailing it to:

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

What does my credit score mean?

There are many different types of credit scores, and each is compiled in a slightly different way. The FICO (Fair Isaac Corporation) score is the most widely used and well-known credit- scoring model in the United States. Your FICO score is determined using data accumulated from different areas of your credit history.

The FICO credit-score range is 300 to 850. According to FICO, the average score in 2020 was 695.

Why is it important that I check my credit report for errors?

Your credit history will determine if you get a loan, and what kind of loan terms you will receive, so it pays to make sure the information in your credit report is accurate. Inaccurate information also could affect your ability to get a new job, apartment, or line of credit. In addition, checking your credit report is an important way to help protect yourself in case of identity theft. If someone uses your name or Social Security number to open new credit accounts, or to commit other crimes, you will be able to see the illegal activity in your credit report and take the necessary steps to clear your name.

How do I fix errors on my credit report?

If you have found inaccuracies in your credit report, take prompt action:

1. Contact the credit reporting agency in writing to communicate the inaccurate information in the report. Provide copies of documentation you have that backs up each of your claims of inaccuracy. In most cases, the credit agency is required to investigate claims within 30 days. If the agency proves the errors, it is required to update your report and alert the other credit reporting agencies to correct the information in their records as well. In addition, upon your request, the credit reporting agency must send notification of corrections to anyone who has received your credit report in the preceding six months.
2. Notify the creditor in writing of the dispute. Be sure to provide the creditor with documentation (copies, not originals) to back up your claims. Call your creditor for the correct address and department to which you should send your documentation, so the creditor can act upon it right away.

Once you have reviewed your credit report, and cleared up any inaccuracies, work to get and keep a good credit score.

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