Get a Free Credit Report
Know your Rights When it Comes to Getting a Free Credit Report.
Like so many things in life, a bad credit rating can oftentimes be the result of an unfortunate credit score error.
Imagine for a moment that you have decided to purchase you’re very first home. You’ve explored the real estate market and you’ve found the home of your dreams. Your real estate broker has walked you through the process – you’ve worked out how much of a mortgage you can afford, and all of the closing costs have been explained. Now all you need to do is get approved for your mortgage, which really shouldn’t be a problem because you’ve always paid off your credit card balance on time. You paid off your car loan in full 6 months back, and while your student loan is high – you’ve never missed a monthly payment. On paper you are a excellent potential borrower…so you sit back and await your approval without worry. However your broker contacts you with bad news – it seems your credit score is low due to an unpaid car loan – and you’ll only be approved for half of the mortgage that you need. But you paid off your car loan 6 months ago! What the heck is going on?
This is what I mean by unfortunate credit error. You did pay off your car loan 6 months ago – however the lender who holds the car loan account never reported it as closed to the credit bureau. That means on paper your loan is outstanding. This is bad in the eyes of potential lenders. So how do you fix such an unfortunate error? Is your credit score now blown for life?
Not at all! It is up to you to identify credit errors on your credit report. You can do this by contacting one of the top 3 credit reporting agencies in the United States. According to the Fair Credit Reporting Act (FCRA), created by the Federal Trade Commission, every citizen of the United States of America has the right to a free credit report every 12 months. This means that you can contact Equifax, TransUnion or Experian on a yearly basis to request, a free copy of your credit report to examine it for similar inaccuracies.
It’s important to look at your credit report on a yearly basis in case such errors exist. An error can end up costing you precious real estate, a much needed loan or even a job. The last thing you want is to be denied a major loan, such as a mortgage, due to a inaccuracy. Once you get a copy of your credit report and notice an error, you have the right to contact any one of the credit agencies directly to dispute the error. This is why it’s important to keep all proof of paid accounts. That way if you encounter an error on your credit report – the dispute will be easy to clear up. If you prove that a negative mark on your credit report is an inaccuracy, the credit bureau is responsible for removing it from your credit record.
Here are the facts when it comes to getting your hands on a free yearly copy of your credit report:
Every American citizen is entitled to free copy of their credit report every 12 months from each of the three major credit bureaus - Equifax, Experian or TransUnion.
Don’t let anyone tell you that there is a fee for credit reports. You are entitled to a free copy every 12-months. Credit reports used to cost approximately $8 each – now it’s every one needed after your free yearly copy will cost you a small fee. The free credit report will NOT give you your credit score. To get your credit score, you will need to contact the Fair Isaac Corporation directly at MyFico.com. It will typically cost between $6 and $10 to get your credit score. To find out more about your credit score read our article entitled Credit Score 101.
You should request your free credit card report by following one of these 3 easy steps:
- Online via AnnualCreditReport.com, which is the only authorized web source for consumers to request an annual credit report for free.
- You can also call them at 1-877-322-8228 and request your free credit report via telephone.
- Request a paper application through the Federal Trade Commission’s (FTC) Annual Credit Report Request Service. The standardized form is available from the FTC. Complete the form on the back of the Annual Credit Report Request brochure. Mail your completed application to this address:
Annual Credit Report Request Service
P.O. Box 105281
Atlanta, GA 30348-5281
Remember to order your free credit report from the FTC or AnnualCreditReport.com or you will be charged the $8 fee - unless you qualify for a free credit report based on the following criteria:
- You were denied approval for a loan
- You were denied approval for an insurance policy
- You were denied a job based on a poor credit report
- You need a credit report in order to apply for unemployment benefits
- You need a credit report in order to apply for public assistance benefits
- You live in a U.S. state that offers free credit reports from the 3 credit bureaus – so far only the states of Colorado, Georgia, Maine, Massachusetts, Maryland, New Jersey and Vermont offer free credit reports.
If you do not qualify for a free credit report according to the above specifications, you can only get one free every 12 months. It will take approximately 15 days to process phone and mail requests – online requests are typically faster. However please note that it will take longer if the information on your form is incomplete or inaccurate, so make every effort to complete the request form fully and accurately. Once you receive a copy of your credit report examine your payment history, accounts, balances and your payment behavior to ensure there are no inaccuracies, typos or open accounts that were actually closed.
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