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How to Get Your Free Annual Credit Reports
Regularly monitoring your credit reports is the key to your long-term financial well-being.
By Bob Musinski , Contributor | June 28, 2018, at 9:00 a.m.
Financial experts recommend you set aside plenty of time to review your credit report. (Getty Images)
If you could get a detailed dossier of your physical health – outlining the positives and negatives in an easy-to-understand form – you’d jump at the chance, right?
Then consider how easy it is to check on a major part of your financial health with a free credit report. It is the most effective way to learn what banks, insurance companies and even future employers will see about your bill-paying past.
Here is a look at how to get free annual reports from the three major credit reporting agencies, why they matter and how regular check-ins can help you stay fiscally fit.
What Is a Credit Report and Why It Matters
Thanks to the federal Fair Credit Reporting Act, the three major credit reporting companies are required to supply a free copy of your credit report once every 12 months, if you request it. The companies – TransUnion, Experian and Equifax – compile information on your bill-paying history, public records related to debt (such as bankruptcy) and inquiries about your credit.
The reports are sold to companies to help them make decisions about your ability to handle major responsibilities such as a mortgage, insurance or even whether you’re fit to be hired for a position.
“The importance of checking your credit report can’t be understated,” says John Ulzheimer, president of The Ulzheimer Group and a national expert on credit who formerly worked with Equifax and FICO.
The Pros and Cons of Credit Cards
Reports also can identify whether you are, or could be, a victim of identity theft.
Gerri Detweiler, education director for Nav, which helps business owners manage credit, says, “In this day and age, with so many reports of data breaches and identity thefts, if you aren’t checking your credit, you’re neglecting one of the key parts of your financial profile. You’re almost opening yourself up for potential problems if you don’t check, such as identity theft or mistakes that can end up being very expensive.”
How to Get a Credit Report
There are three ways to obtain your free report from the three major credit reporting companies:
Website: Visit AnnualCreditReport.com and follow the instructions. Once you fill out the necessary personal information, including your Social Security number and date of birth, you can select whether you want one, two or all three of the credit companies’ reports right away. After answering some questions about your past addresses and accounts, you’ll have a chance to download the report and view it on your screen.
The best option is to print it right away. It could be two dozen pages or more, depending on how much credit history you have, such as current or recent credit cards and mortgages.
Toll-free number: If you call 877-322-8228, the report can be mailed to you.
Mailing address: To conduct the process almost entirely by mail, download the annual credit report request form, fill it out and mail it to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.
What Does a Credit Report Look Like?
Credit reports can be long but generally aren’t too intimidating for consumers.
“Reports have been constructed in such a way they’re pretty easy to read and understand,” Ulzheimer says.
There are several sections to the report that cover both the good and bad, if needed, of your credit history. At the top of the report, you’ll see personal information such as your name, addresses from the last couple of decades or more, telephone numbers, and current and former employers. That’s followed by public records that might show a bankruptcy, court judgment or lien.
Next, you’ll see information about problem accounts, such as ones where you missed a payment or even went to collections. These often stay on your credit file for up to seven years from the date of the delinquency.
The listing of satisfactory accounts follows – these are ones that are reported to be in good standing for at least a few years.
In the inquiry section, you’ll see different types of requests for your credit information.
The promotional requests are from companies that get limited information about your credit so they can make an offer for a credit card, loan or insurance policy. If you don’t want to receive these preapproved credit card offers, you can opt out for five years or forever through OptOutPrescreen.com.
You might have other credit inquiries that were generated when you shopped around for a mortgage or car loan, for example. Fortunately, those types of credit inquiries aren’t as detrimental to your overall report as they used to be, says Ed Mierzwinski, senior director, federal consumer program at U.S. PIRG, a consumer advocacy organization.
Why You Need to Review Your Credit Report
Maybe you’ve taken a quick look at the report and are ready to toss it into a file. Resist the temptation. Experts recommend you set aside an adequate amount of time – maybe an hour – to review it.
Detweiler recommends three stages of review for each report. “First, read through and flag questions you have,” she says. “You almost certainly will have questions. See if you can find an answer on a reputable website or contact the credit bureau.” Then, she suggests you identify anything you think is wrong. You can dispute the issue online or by mail. Finally, “really look at it from a lender’s perspective,” she says.
Detweiler has encountered mistakes in her own past reports, including a mortgage lender that marked her payments as late multiple times. She had to contact the lender to get it fixed.
“Consumers think if they pay their bills on time, they don’t need to worry about it,” she says. “But mistakes can happen. You can get mixed up with someone else, or a credit report can indicate that you’re a target for fraud.”
Finding and Fixing Signs of Fraud
Some credit report mistakes are more innocent than others. Slight variations on your name and a listing of an address where you never lived could be a sign you’re being targeted for fraud, Ulzheimer says. Also, “if you find accounts in default that don’t belong to you, that could be indicative of fraud,” he says.
What can you do to correct these potentially costly errors? The first step is to contact the credit bureaus and the creditors or service provider to check on – and potentially challenge – the information. If the problem is an unpaid debt in an account that was taken out fraudulently in your name, you might have to file a police report and affidavit, Ulzheimer says. This helps separate you from others who tell credit bureaus and creditors the same story, but who are actually trying to get out of paying their bills.
How Frequently Should You Check?
Just as you see a doctor for a general checkup once a year, you should check credit reports “at the very least once a year,” Ulzheimer says. “I think you should do it once a month because credit reports go through an entire cycle of changes every 30 days.”
If you haven’t pulled a free credit report in a while – or ever – then you might want to consider pulling all three at once to get a baseline idea of how each of the credit reporting companies rates your credit. The downside is that you wouldn’t be able to get another free report for a year.
Another idea is to stagger the reports, maybe pull one from Experian right away and follow up every four months with another entity. Several states allow their residents to pull additional free reports per year, and fraud victims can also get extra copies. Experts insist that you shouldn’t need to pay for information about your credit history.
“In 2018, if you’re pulling out a credit card in order to buy a credit report, then you haven’t looked hard enough for all the free options,” Ulzheimer says.
But don’t get carried away by your monitoring, he cautions. Monitoring any more than 30 days at a time “is like watching grass grow,” Ulzheimer says. “There are minor changes here and there, but daily it will look almost exactly as the day prior.”
Mierzwinski says that another option to consider is a credit freeze. A freeze would allow you to restrict access to your credit report. Thanks to the recently approved federal banking deregulation law, the three major credit reporting agencies will soon allow you to freeze your credit for free. This law pre-empts states from passing stronger credit freeze laws on their own, though, he says.
Understand Your Credit Card Statement
Save your hard-earned money and future headaches by knowing how to review your statement for errors and fraud.
Credit Scores and Financial Health
Credit scores are not included in free annual credit reports. But several dozen credit card companies and other sources will give you a credit score and a summary of your credit history at no cost, Ulzheimer says.
“Monitoring the score is important, but not in lieu of monitoring credit reports,” he says. “The credit score will not tell you if something fraudulent has hit your credit report.”
That’s why reviewing your report and fixing any issues related to your payment history is the primary concern.
Mierzwinski says, “You can improve your credit score yourself, presuming you are responsible for what’s on your credit report. You should educate yourself and learn that the most important way to fix your credit score is to pay off your bills, put them into the past, and pay current bills on time.”
Key to a Strong Financial Future
One common mistake is for people to assume they can ignore credit reports until, say, a few months before the purchase of a home or car. If you want the best interest rate, you need a high credit score, which means your credit report needs to be spotless.
It’s never too early – Ulzheimer says that 18 years old is a good time to start – to look at your credit report, especially if you want to make a major purchase at some point in your future.
“I suspect that many people are interested in eventually owning a house,” Ulzheimer says. “It’s your largest purchase ever, and therefore it’s in your best interest to get the lowest interest rate possible. It can cost tens of thousands over the life of a loan if the rate is higher than you’d like it to be.”
This fits into Ulzheimer’s contention that excellent credit is an ideal way to build wealth. After all, it’s better to pay a 2 percent annual percentage rate rather than a 4 percent APR for things you already plan to buy.
Improve your credit card habits.
Many consumers either love or hate credit cards. They can be extremely helpful if used responsibly, but they can also hurt you if you don’t use them right. Wondering how you can use your credit card better? Check out this list of mistakes to avoid and what to do instead.
Not reading the fine print.
Let’s start from the beginning. A lot of issues stem from not reading or understanding your credit card agreement. For example, if you try transferring your balance to another card without understanding the rules, you could end up owing more.
Instead: Resist the urge to automatically scroll to the bottom of the page and agree to your card’s terms. Make sure you know what you’re getting yourself into, from your card’s rewards program to fees.
Not using it.
Credit card companies don’t make as much money if consumers don’t use their cards. If you haven’t used your credit card in awhile, your credit card issuer could deem your card inactive and close your account, which could negatively impact your credit.
Instead: If you are reluctant to use credit but want to keep your card open, try placing a small recurring fee on it and paying it off immediately each time. Alternatively, swipe it every few months for an item you need to buy, like groceries.
Not paying on time.
Not paying your bills on time doesn’t just severely lower your credit score – it could also cost you monetarily, as your credit card provider may penalize you by charging a late fee and raising your interest rates.
Instead: If you keep forgetting to make payments, set up as many reminders as necessary to ensure your bills get paid. If you can’t pay on time because you don’t have enough money, try scrutinizing your budget to see where you can cut back and asking for a grace period or reduced minimum payment. Your credit card company may understand if you demonstrate that you’re working to remedy the situation.
Only making the minimum payment.
Simply put, paying the minimum each month could cost you a lot of money and take forever to pay off. Say you have a credit card with a $1,000 balance and a 14.95 percent interest rate. According to Credit Karma’s debt repayment calculator, if you only paid $25 a month, it could cost you an estimated $393 in interest and take you an astonishing 56 months to pay off.
Instead: Rethink what you pay monthly. If you need convincing to pay more, just take a look at your credit card statement – it should tell you how much it will cost you if you only pay the minimum.
Using all the credit you’re granted.
Excessively swiping your card isn’t just bad news for your wallet – it could also hurt your credit score. Many scoring models factor in how much of your credit limit you’re using because the more credit you use, the more likely you may not be able to pay everything off.
Instead: Monitor your utilization rate and make sure it never gets too high. A good rule of thumb is to aim for a rate under 30 percent. However, note that this doesn’t mean you have to keep a balance on your cards!
Taking cash advances.
Strapped for cash? Avoid using your credit card for cash advances unless it’s an emergency – with sky-high interest rates, upfront fees and no grace period, it could be a costly mistake. While it could be a better option than taking out a dangerous loan, like a payday, pawnshop or car title loan, it’s still best to avoid if possible.
Instead: Consider other options, like applying for a short-term loan product, asking for a payday advance or borrowing from a loved one.
Closing it (for no good reason).
As mentioned earlier, closing an account, whether done by you or your credit card provider, could negatively impact your score. Unless you dramatically reduce your spending, closing a card (and saying goodbye to that credit limit) will probably increase your credit utilization rate. It could also lower your average age of accounts when the card falls off your credit report.
Instead: Exercise caution when considering closing any cards, as doing so could cause more harm than good.
Spending just to earn rewards.
If you have a rewards card, it can be tempting to spend just to earn that 5 percent cash back or those airline miles. However, if you end up buying things you don’t need just for the perks, it could cause you to spend more than you can afford.
Instead: When shopping, question why you’re buying each item and whether you really need everything you’re purchasing. If you don’t have a good reason, consider delaying your purchase. This could help prevent both impulse buys and faulty justification for shopping.
Ignoring your monthly statement.
We’re inundated with information these days, but one thing you don’t want to ignore is your monthly statement. Looking over it regularly can help you learn about changes to your interest rates and fees, remind you of your payment due date, help you spot erroneous charges quickly and more.
Instead: Regularly check your accounts, and make sure you know the state of each card you own. It could save you a world of trouble in the future.
Carrying a balance to improve your credit.
Carrying a balance on your credit cards because you can’t afford to pay off the entire amount is understandable. Carrying a balance in hopes that it will improve your credit score is a huge mistake and one of the biggest credit myths out there. You don’t need to carry a balance to build credit – the balance reported to the credit bureaus is from your last statement, not what is carried over to the next statement.
Instead: Pay your bills in full as often as possible. You don’t need to pay interest to have a good credit score.
An award-winning writer, editor and content strategist, Bob Musinski focuses on trends and issues related to credit cards and loans for U.S. News. He also has written dozens of stories for publications such as AAP News, Naperville Magazine and Natural Products Insider. He worked as an editor and reporter for three daily newspapers and an international wire service, where he covered events such as the World Series and Super Bowl and earned a national writing award from the Associated Press. His experience also includes planning and writing annual reports; strategizing, editing and writing for blogs; speechwriting; and strategic messaging development.
A graduate of Marquette University, Musinski has served on the Marquette University Diederich College of Communication Alumni Association board as well as in the College of Communication Mentor Program. You can follow him on Twitter and connect with him on LinkedIn.