Whether you’re applying for a loan, renting an apartment or financing a new home, your credit report can have a big impact on your finances. But plenty of people don’t check their reports until they feel like they “need” to, and that can be a big problem. If you haven’t checked yours lately, you may not be sure what you should be looking for – or even why it matters. But don’t worry: This no-fear guide can help.
First of all, what is a credit report? If you’ve ever borrowed money – in the form of a loan, a credit card or other debt – you have one. It’s a financial document that records a history of how much you borrowed, how long you’ve had the account and whether the payments were made on time. Combined, these components determine your credit score.
What’s in my credit report? There are three major U.S. agencies that provide these reports – Experian, Equifax and TransUnion – and each is slightly different. But regardless of the company, you’ll see a statement of all your credit accounts, their balances, and whether they’re open or closed. You’ll also see your payment history, any unpaid accounts and a record of previous inquiries into your credit (such as those you’ve made yourself, or those made by a lender.)
Why do I need to check my report? To make sure it’s accurate. Mistakes happen … but when they happen on your credit report, it can artificially drag down your credit score, which can impact any big decisions or purchases you make in the future. For example, if your personal information is incorrect, it could result in someone else’s reports being recorded under your account. There could also be errors in your credit history, such as accounts marked incorrectly as unpaid.
Okay, I’ll check my report … but what’s the best way to do that? Every 12 months, you can request a free copy from each of the three credit bureaus at the Annual Credit Report website. Space it out and order a free copy from one of the credit bureaus every four months.
When you review your report, make sure that your information is accurate. Go through each account to confirm the payment history and balances match up to your own records. Take note of any errors, and then gather documentation and request a correction. You should hear back within a month, so be sure to follow up if you don’t.
Good credit is key to a sound financial foundation, and it takes time and effort to strengthen it. By building good habits and keeping tabs on your credit report, you can make sure that errors and misattributed information aren’t burdening your budget.
At Axiom, we’re here to help you take control of your finances – and that starts with real information from experienced community bankers. Visit an Axiom branch today or go to www.axiombanking.com to learn more.
Axiom Bank, N.A., a nationally chartered community bank headquartered in Central Florida, provides retail banking services, including checking, savings, money market and CD accounts, as well as commercial banking, treasury management services and commercial loans for both real estate and business purposes.