Use Your Credit Reports to Your Advantage

April is Financial Literacy Month so sit back and catch up on your reading by learning how to get your credit reports and use them to your advantage!

Getting a free copy of your credit report is easy. You simply order them annually from the three major credit bureaus–Equifax, Experian and TransUnion by visiting or by calling 1-877-322-8228. Don’t be fooled by all the companies advertising “free credit reports,” this is the only trusted location where you can order free reports once a year without any ancillary costs.

Once you have your credit reports it’s time to carefully look at them for mistakes or inaccurate information that could harm your credit score. These mistakes can happen because of human error (a person sends a creditor inaccurate information on a bill payment), or because an automated process in the bill paying cycle broke down, or because of credit card theft or identity theft.

If you do find errors don’t ignore them – even the slightest error. They could lead to higher interest rates, and the inability to qualify for credit when trying to take out a loan for a house or car, and can even prevent you from getting a job because flaws on your credit report lead to plummeting credit scores.

If an error is spotted don’t panic. This is the time to take advantage of your credit report and act to save your credit score from any damage. First contact the credit bureau by phone and follow up with a letter containing all the pertinent information regarding the items you are disputing and why you are disputing them. Include copies of your credit report and circle the items you are disputing – you can also include any other materials, copies of credit card statements, etc., that reinforce your case. Also, supply them with your contact information and a request for elimination of those entries on your credit report. Once you have that all prepared send the letter and the other materials by certified mail with a return receipt requested. This way you’ll know the bureau received the mail. And don’t forget to keep all paperwork in a neat file so you’ll have it handy when supporting your case.

It’s also wise to contact the creditor that’s associated with the dispute. You can phone and also follow up with a letter and photocopies of all information that supports your argument. Be prepared for a drawn out process that could take months to resolve. But it’s worth the wait because damaging your credit score, even by as little as 20 points could negatively impact your ability to obtain the best interest rates on a variety of items. Banks will not pity you because of your unique situation; they simply look at a credit score and react.
If your credit report looks fine don’t forget to examine other things on the report, such as your name and address. That seems obvious but many people take it for granted and don’t notice an unknown address or PO Box number, which could mean that someone is trying to steal your identity.

Receiving an annual credit report is essential to keeping your credit score healthy. If you are unhappy with your credit score but don’t notice any anomalies then it’s up to you to improve the score by paying down your debt and making payments on time and on a consistent basis. So get yours as soon as possible and take advantage of the information provided.