Cutting Credit Costs: Free Credit Reports

This article explains free credit reports, how to obtain them, how to read them and interpret your score, and what to do if your credit report has errors.
Cutting Credit Costs: Free Credit Reports - Articles

Updated: September 14, 2017

Cutting Credit Costs: Free Credit Reports

Your credit report is often a key determinant in whether you’ll get the mortgage or car loan you’ve applied for, the insurance (auto and homeowner’s) coverage you need, or the job or apartment you want. It can also help you spot and stop identity theft: America’s fastest-growing crime.

Except in special cases, consumers have always had to pay to see their credit reports. That changed on September 1, 2005, when the Fair and Accurate Credit Transactions Act (FACTA) of 2003 completed its cross-country phase-in program. Now, all U.S. consumers are entitled under FACTA to one free copy of their credit report annually from each of the three major credit reporting bureaus: Equifax, Experian, and TransUnion.

Here’s what you need to know to perform a check of your credit report.

How do I get my free credit reports?

You can order free credit reports from a site run by the three credit bureaus under the backing of FACTA. You’ll need to provide your name, address, Social Security number, date of birth, and other personal information. Applying online should generate a same-day response. If you prefer, you can call (877-322-8228) or write (Central Source LLC, PO Box 105283, Atlanta, GA 30348-5283) to get your reports.

Can I order all three reports at once?

Yes. Doing so allows you to compare them. Or you can order them separately, spread out over time to track activity in your file. For example, you could order one free credit report every four months from each of the three credit reporting agencies. (January—Experian report, May—Equifax report, September— TransUnion report). However you order them, experts recommend you review your reports a few months before applying for a mortgage or any major purchase that could trigger a credit check. Just remember, once you order your report, you can’t get another from the same credit bureau for 12 months unless you pay for it or meet special needs (e.g., unemployed, denied credit, identity fraud victim).

What will I see when I read my reports?

Reports from the three bureaus may differ in content and format. Generally, however, each will include at least the following sections:

  • Personal Information (name, birth date, full or partial Social Security number, current and past addresses, employers, etc.)
  • Public Records (any bankruptcies, arrests, foreclosures, tax liens, and judgments against you)
  • Credit Account Information (name and address of creditors, account balances, and payment histories)
  • Inquiries (who has been looking at your credit report, and why)

Credit report sample

What if there are errors?

A 2004 survey by the U.S. Public Inter-est Research Group found that nearly 80 percent of credit reports contain mistakes. Most are minor, but one in four reports has serious errors—the kind that can deny you consideration for a loan or a job. If you find an error in a report, contact the bureau that prepared it, in writing, via certified mail. Unless your complaint is deemed frivolous, the bureau will have 30 days to investigate it. If the investigation results in your favor, the error will be corrected and you’ll receive an amended report. (For more on this process, check with the Federal Trade Commission.)

How can my credit report protect me from identity theft?

Identity theft is the unauthorized use of your personal information to commit fraud. Such acts are often reflected in your credit report. (Many suspicious “inquiries” can be a clue.) If credit report problems are a result of identity theft, you can ask the three reporting bureaus to put a fraud alert on your file. This requires creditors to contact you before opening new accounts or making changes to existing ones. Initial alerts last for 90 days; extended alerts continue for seven years.

Your credit report should present an accurate accounting to those who use it to make decisions about your financial future. You can increase the accuracy of your report by reviewing it at least annually.

Types of credit report errors and their frequency (U.S. PIRG Reports 2004).

Credit scores

Creditors may use your credit score in making lending decisions. Also known as a FICO® score, this calculation is derived from data in your credit report and is used to predict how likely you are to pay bills on time. Each credit bureau calculates a FICO® score, but each bureau may arrive at a different number. Credit scores are not free and they change as the information in your credit history changes. Generally, the higher the score, the easier it will be to get credit. Like credit histories, credit scores should be checked just before making a major purchase.

“Free” reports that can cost you

Many Web sites offer free credit reports, only to charge you for incidentals (such as a monthly credit monitoring service) or trick you into divulging personal information. The one source of truly free reports under FACTA is the Annual Credit Report Request Service. Although the three credit reporting bureaus are permitted to sell credit scores from that Web site, purchasing a credit score is not required for you to get the free credit report.

Credit reporting bureaus

Equifax, 800-685-1111

Experian, 888-397-3742

TransUnion, 800-916-8800

Prepared by Cathy Faulcon Bowen, associate professor and extension specialist, consumer issues programs, Department of Agricultural and Extension Education.

Authors

Personal Financial Education Consumer Education

More by Cathy F. Bowen, Ph.D.