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The Guide to Understanding and Protecting Credit
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Your credit report is a "report card on your personal finances." It is the "credit snapshot" you present to lenders, and thus a valuable asset. It is an important key to your financial future, because it can cost you or save you a lot of money. Based largely on the information in your credit report, and the resulting credit score you achieve, lenders determine whether they'll extend you credit, and how much interest you'll be charged for virtually everything you finance from a home to a car, to credit cards, and much more. The information in your credit report can also affect your insurance rates and whether you're hired for a job. When it comes to your credit report, how much money is at stake? Over your lifetime, the amount of money your credit can cost you, or save you is staggering. It can run into the tens of thousands or literally hundreds of thousands of dollars when you factor in the total amount of additional interest you might have to pay for a home loan or refinance, auto loan, and many other areas where you rely on financing. The bottom line: your credit report is serious business, well worth protecting and monitoring on an ongoing basis so you get the credit you deserve. Information on your credit history will be contained in three separate credit reports from each of the credit bureaus: Equifax, TransUnion, and Experian. It's important to check and monitor all three of your credit reports because the information in each report may vary. Why? Because, different creditors may report your credit account and payment information to separate bureaus, and companies checking your credit may only use one of the three credit bureaus Your Credit Report and Identity Theft Protection It's not only important to monitor your credit reports on a regular basis to help ensure that you get the credit you deserve, but credit monitoring can also provide you with a "first line of defense against identity theft." For example, you review your credit report and discover that your personal information has been changed without your authorization or you find a credit card inquiry or account listed in your name that is not really yours. Both of these situations can be an indication that your identity has been stolen, and you may need to take immediate steps to file a report, contact your creditors, and place a fraud alert on your credit reports. Learn more about Identity Theft and steps you can take. Your credit report provides your credit history as it has been reported by lenders to one or more of the three credit bureaus: Experian, TransUnion, and Equifax. Let's see what information is typically contained in a credit report. Personal Profile - Includes Name, Address, Social Security Number, Birthday, and Employment Information Credit Summary - An overview of your current and past credit status, including the total number of open and closed accounts in your name, the balances, and delinquencies. Public Records - State, Federal, and County records on bankruptcies, foreclosures, suits, wage attachments, liens, judgments, overdue debt from creditors/collection agencies, etc. Credit Inquiries - A record of who has obtained a copy of your credit report. Inquiries remain on your report for up to two years. When checking your credit reports, it is important to review all areas of your credit report thoroughly. The only one who can possibly know if the information in your credit report is accurate is you. If you discover information on your credit reports that you believe is inaccurate, all three credit bureaus now give you the ability to file an online dispute form. Next Lesson: Your Credit Score: A financial asset worth protecting Get Your Credit Score, Credit Report and a 3-Bureau Credit Monitoring Free for 30 Days
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