Credit Reports: 3 Things to Know and Do Today

There are 3 things to know about your credit reports. Though there are many facts and myths about credit, these are the must do’s when it comes to your record of borrowing, employment, and other personal identity information.

Please know that I am not referring to your credit score, which you should not be concerned with much. If you want to know what the best credit score is and how to get it, read my post: The Best Credit Score, Not What You’d Expect. Furthermore, you really only need to be concerned about the data that comes from the consumer report from which your credit scores are calculated.

So, let’s dive into these 3 fundamentals to get you on the road to safeguarding your credit report: Frequency, Agencies, and Security.

Frequency – Put in on your calendar

I’ve been asked, “How often should I check my credit?” My answer is always, “at least once per year”. There are many financial to-do’s you should accomplish annually. See some examples in the next section.

Other times you should do your due diligence is when you have had a major life change. For example, you are getting married, there is a new addition to the household, you or your spouse are starting a business, … or the opposite of any of the above.

Depending on the situation, you may need to do some mid-year checkups between these major annual events. For example, you may have had a nasty bankruptcy and there is a lot to clean up. Though, checking your credit report more than every 3 months won’t do much good.

Reasons for increasing the frequency are preparing to buy a home, demolishing your debt, or maybe you’ve had a recent foreclosure, or repossession. Notice, except for purchasing a home, the times you need to check these reports more often are to clean up past mistakes.

Make It an Event

Set a time and a place and add it to your calendar. This is important because what doesn’t get scheduled doesn’t get done. Do it as a couple if you are married, or include your accountability partner if you are not. This event is vital, so you want to make an intentional effort to accomplish your list. Be prepared beforehand and print your reports from all the sources listed below. And bring your previous year’s reports to compare.

I love setting aside a weekend and making it an event. You could rent a cabin for the weekend away from distractions. However, staying home may work best for you. Every year you will get more in tune with the best length of time you need and the perfect place to do it. Whatever you do, make sure it is a time and place where you will get it done.

As I said above, there are many tasks you should accomplish at this annual event. For example, checking and updating your wills, trusts, and POAs, making sure you have proper insurance coverage and best rates, looking at your current tax withholdings, as well as many other tasks. This occasion can be about planning to leave a legacy you can be proud of as well as making sure your ducks are in a row.

Agencies – Where to Get Your Credit Reports

Do you know how many consumer reporting agencies there are?

Dozens!

If you don’t believe me, check out the Consumer Financial Protection Bureau’s list here: List of consumer reporting companies.

Yes, there are reporting agencies for credit, employment, medical, utilities, gambling, and more. Don’t worry, you don’t need to pull a report from every agency that has collected information about you. Most of these will never have any bearing on your future financial decisions. So, I will give you my top 5 and there are only 3 websites needed to gather all the documentation.

The Big 3 Credit Reports

Firstly, you need to get your credit reports from the major three U.S. credit reporting agencies: Equifax, Experian, and TransUnion. You should only go to Annual Credit Report to access these free reports because, as it states at the top of their webpage, it is the only source for your free credit reports, and it is authorized by Federal Law.

It is free to access each report once per year on a normal basis, but due to the COVID-19 pandemic, they are allowing access to a new report every week through April 2021 (at the time of this writing.) Note that all three don’t have to been accessed during the same session. So, in the non-pandemic years, some people check one of the three bureaus every 4 months, creating a mini-event three times per year.

The “Big 4th” Credit Report

Secondly, you should get a second opinion (actually, it’s the fourth). The fourth-largest credit reporting agency is Innovis. Order your Innovis Credit Report and see the information they have collected on you. All four of these reports not only gather your history of credit interactions, but phone numbers, addresses, name changes, employment history, and who has accessed your information amongst other data.

And One More Report

Thirdly, I highly recommend you check out one of the non-credit reporting agencies: ChexSystems. This report is just as important as a credit report because it tracks your checking and savings banking activity. Click here to request a copy by mail and you can get an updated record once every 12 months. Your report will have similar personal data as the other reports above have, plus check cashing inquiries, history of checks ordered, identity theft security alerts, and much more.

Security – Keep Your Credit Reports on Lockdown

Now that you have all this paperwork, what do you do with it? I’m glad you asked.

The main reason for going down this road and accessing these credit reports can be summed up with one word: Security. Identity theft and fraudulent activity is running rampant and only increasing in the future. Though you may want to buy a service to defend against these attacks, you can mitigate the issue by keeping tabs on your information. Here are the 2 things you need to put on the to-do list.

Firstly, know your information and compare this true data with each report. File a dispute if you find discrepancies. You must be notifying the individual agency of an actual error, not just something you don’t want on the report but is factual.

Innovis makes the simple statement: “If you believe information contained within your Innovis Credit Report is incomplete or inaccurate, you may request an investigation.” – Innovis

The process has become much easier than in the past. Just follow the simple instructions directly on each consumer reporting agency’s website. The following are links to keep handy where you can file a dispute for each of the above 5 agencies. (Warning! Each agency has products that they want to sell you. Ignore these offers and stay focused on the task.)

Secondly, and my favorite way to keep my information safe and sound, is to freeze all the reports. What does freezing a report mean? Here is how ChexSystems describes the process:

“You have a right to place a security freeze on your consumer report, which will prohibit a consumer reporting agency from releasing any information in your consumer file without your expressed authorization. The security freeze is designed to prevent credit, loans and services from being approved in your name without your consent.” – ChexSystems

It is free to put a freeze on each report. You will be preventing someone from opening a bank account or credit card in your name. Nevertheless, you can easily and temporarily remove the freeze if you need to down the road.

The following are links to keep handy in order to freeze your data from each of the above 5 agencies. (Once again, ignore the products each agency wants to sell you. Stay focused!)

Equifax

https://www.equifax.com/personal/credit-report-services/

Experian

https://www.experian.com/freeze/center.html

TransUnion

https://www.transunion.com/credit-freeze

Innovis

https://www.innovis.com/personal/securityFreeze

ChexSystems

https://www.chexsystems.com/web/chexsystems/consumerdebit/page/securityfreeze/placefreeze/

Keep them on locked down so no one can use your identity for credit purposes (even you). You don’t even need credit. One day I hope you print these reports, and they are pretty much blank pieces of paper. Why? Read this: 4 Reasons to Cancel Credit

Now that you know these 3 things about your credit reports, go get it done. Don’t delay! It is an important target to focus on as you Zero In!