Your Credit Report: What It Is and How to Fix It Fast
So a friend at the dog park (a pushy pit bull from Hyde Park) recently asked me the secret to getting rich.
That’s a big question and rich can mean a lot of different things to different dogs/people. However, it made me think of the book Titan , about John D. Rockefeller, and how he journaled every penny earned and spent. You need to know exactly where you money is going and where the leaks are.
Here’s the perfect place to start. You can get your Credit Report for free by going online to the website the three companies (Equifax, Experian & TransUnion) jointly sponsor at www.annualcreditreport.com.
This is the only way to get a truly free report.
Why do you need to check your Credit Report?
The Report is made up of info from merchants, utilites, banks, court records, and creditors. Your Report and Scores are used by lenders in connection with a wide variety of credit products including:
- Credit Cards
- Auto Loans
- Home Equity Lines & Loans
- Personal Loans & Lines of Credit
- Student Loans
FOR EXAMPLE: HOW YOUR CREDIT SCORE (determined by your report) AFFECTS YOUR MORTGAGE
(based on a $300,000, 30-year fixed-rate mortgage)
Score –Interest Rate -Monthly Payment
760-850- 4.650% –$1,547 – This is a High Score
620-639 –6.239% –$1,845 This is a Low Score
Thats a $3,576 difference annually!!!! ( that’s a lot of bones). You want the optimal rate you can get so start with your Credit Report.
You get one free report per company a year. So every year you should review your report, but if is the first time and you dont have any big purchases coming up, I suggest getting your report from Equifax in September, Experian in January , and TransUnion in May. In that way we have hit all three companies in a years time for free.
Just an FYI, checking on your report yourself is considered a “soft inquiry,” which you are allowed to do as much as you want—as opposed to a hard inquiry from a potential lender, too many of which can hurt your score.
Your credit report is not your credit score. The law gives you free access to your credit report, you have to pay extra to get the score- we can discuss your Score in a later post.
- STEP NO. 1 Get your credit report and check it for errors.
Lets do it together: Request yours now.
- Go to www.annualcreditreport.com.
- Complete your info name, DOB, etc.
- Pick Report-“Equifax”
- Answer a few security questions
- You can then download your report
Holy smokes, mine is 71 pages!
It provides you with a summary of your credit accounts, balances, available credit, limits and Debt-to-Credit Ratios.
Just a wealth of info!
Making Corrections to your Credit Report
- If you find and error, once you request a correction from a credit bureau, it must respond within 30 days.
- Fixing an error at Equifax however won’t correct it at Experian or TransUnion.
- All three credit bureaus recommend you use the correction forms on their particular websites.
- You will also want to contact the Lender in error.
Don’t wait, it takes 5 minutes and is downloadable.
Some Definitions from your Credit Report:
Paid charge off-lender forgave an amount-gray mark on report
Paid collection– you didn’t have money and leasing company agreed to nothing from you
Settled in full– if you settled a credit card debt for less than the amount
Paid in full, not full price- not a black mark, not too bad