By now, you should have seen or at least heard of the government program ensuring every American has access to free credit reports. Every year, you can access your credit reports with Equifax, Experian and TransUnion free of charge through the government’s free credit report Web site.

Be sure to print copies of all three credit reports. While it seems logical that the three reports contain the same information, you’ll frequently find discrepancies between them.

This comprehensive credit report includes your personal information (employment history, residence, etc.), owed debt and payment history for any open and closed accounts. One thing that is not provided with your credit report is a credit score. Equifax, Experian and TransUnion require an additional payment to provide you with a credit score.

Nonetheless, some financial institutions, banks and credit unions, will provide your credit score if you ask. You can save money and access your credit score without having to pay any additional fee if your bank or credit union offers that complimentary service.

Breaking Down a Credit Report

Equifax, Experian and TransUnion use different formats for their free annual credit reports. It may take a minute to familiarize yourself with the layout. The three reports begin with your personal information. Here you’ll find information about yourself including your employment history, residential history, date of birth, your social security number and possibly your driver’s license information.

Mistakes in the personal section often occur in the length of employment. This is especially true if your employer changes owners. An example of a common mistake involves a company that changed owners four years ago. While you may have worked for a company for twenty years, you find your employment history shows four years because of the ownership change.

Next is information regarding your credit history. You’ll receive a list of your secured debt (car loans, mortgages, home equity loans) and your unsecured debt (credit cards, student loans). With each company is a record of the past two-year’s payment history. The goal is to show no late payments.

In the credit history section, verify the amounts of debt, the length the account has been open, that late payments were truly late and that you recognized each open and closed account. Late payments are something you do not want showing up in this section!

With luck, your public record’s section is empty. Foreclosures, bankruptcies, tax liens and court judgments appear in this section. Having an entry in the public record’s section is the kiss of death for most people. If you do have entries here, make sure they’re removed when the time limit has passed. Bankruptcy listings disappear after ten years. Tax liens and other negative credit entries can stay on your credit report for seven years. Federal and state laws dictate these lengths so they may vary.

Finally, the fourth section of a credit report includes all the inquiries people have made into your credit report in the past year. You’ll discover exactly who is looking at your records and when they last accessed it. This section includes “hard” and “soft” entries. Hard entries occur when you apply for a loan. “Soft” ones are those done by companies using your credit report to establish interest rates or offers. Typically, the hard entries are the only ones that will affect your credit score, so try to keep those to a minimum.

If your credit report has a credit score, it’s usually at the top of the report. Remember that you want a 700 or better. The average credit score in the U.S. is current at 692 (April 2009). If your score is lower than you would like, focus on easy ways to improve your score.

Reporting Errors

The most important thing to look for on a credit report is accurate details. Late payments drag down your credit score, so verify that any notification of a late payment was, in fact, late. If you have proof you paid on time, bring that to the credit reporting bureaus attention. This can help improve your credit score.

Also, look for accounts that you do not have. With skyrocketing numbers of identity theft, it is critical to verify the accounts listed are definitely yours. If you do find errors, contact both the creditor who reported incorrect information and the credit bureau that has the error in their report. Send a certified letter with return receipt to each of them and include photocopies of any documents you have as proof.

When it comes to credit scores, some things just don’t matter – and others matter a whole lot more than you may expect. Although the exact calculation used to determine your credit score may never become public knowledge, patterns have emerged which provide clues to the mysterious calculation based upon the whims of big-wig financial gurus. Unfortunately, this calculation changes often – without notice, and without much clue as to what, why, or how it changed. As a result, there are a lot of credit score myths floating around, so make sure you base your actions on the most current information available.

Bad News For Your Credit Score

Some of the biggest negatives to a credit score are bankruptcies, foreclosures, and tax liens. Each can take 200 points or more from your score, so be very careful to avoid these situations at all costs. Bankruptcies are the easiest to recover from, as these only stay on your report for 10 years. Although foreclosures last just 7 years, your chances of getting a loan are much slimmer than if you declared bankruptcy. Worst of all is a tax lien – if you pay it late, a tax lien stays for 10 years, but if you don’t pay it stays for 15 long years. Otherwise, if you pay a tax lien on time, it just hangs around for 30 days.

Credit Score Myths

Sorry to say it, but paying that electric bill on time every time won’t do a thing for your credit score – but if you’re more than 30 days late, the electric company might report it to a credit bureau. The only thing bills can do to your credit score is harm it if you don’t pay on time, and the same is true for almost any payment history. Another common myth is every credit request inquiry hurts your score, and that isn’t true either. In all actuality, employer and personal credit request inquiries don’t harm your credit score at all – only when creditors and lenders put in the request does it take a few points off of your credit score. Although factors such as your current income and employment history do not directly affect your credit score, lenders and creditors often use this information in determining your credit-worthiness.

Good News For Your Credit Score

Also contrary to popular belief, having a balance on your credit card is actually a good thing. The trick is to keep your balance lower than 30% of your total available credit line every month. The closer to zero balance you maintain every month, the higher your score will climb, but a zero balance is just as bad as a balance over 30%. It also helps a great deal if you have the same credit cards and other credit-based accounts for a long period of time, since your “credit age” also affects your credit score. The “older” you are, the better your score. Basically, those big financial gurus are trying to make an accurate system to judge your credit-worthiness. So all these picky tricky rules are in an attempt to make something solid, static, and simple out of a human being’s actions – which are very obviously not solid, static, and simple. Just think for yourself what would make good business sense to a lender, and helping your credit score will become second nature.

Points of Contact:

Debt Free America
888-225-5332

AFS – Non-Profit Credit Counseling
(866) 851-4305

Rapid Services
(516) 216-1421

Reduce or Eliminate Your Credit Card Debt
(866) 764-8079

Coastal Credit Solutions, Inc. – Credit Management
(866) 415-9649

Free Debt Counseling – MMI and CCCS
(866) 264-6103

Mark A. Zirogiannis, PC
(516) 333-6200

Lexington Law Firm
(866) 906-1265

Solve Debts
(866) 905-9656

Credit Care
(866) 462-1636

Bruce C. Bridgman
(888) 890-7379

Genesis Financial Management
(866) 496-2651

DTS Financial Debt Settlement Company
(866) 432-1466

Successful Solutions Financial Services
(866) 404-8464

Express Debt Settlement
(888) 771-3328

Rausa D J Attorney At Law
(800) 422-3328

A Professional Credit Services
(800) 645-2190

Yes! Though the Fair Credit Reporting Act has been around since 1970, a new amendment as of 2003 gives consumers the legal right to obtain one free credit report from each of the three credit bureaus each year.

You may receive a 3-in-1 report to compare and contrast your reports at the same time; or you may space them out every four months, getting free reports from Experian, Equifax and TransUnion.

Generally it’s recommended that you stagger your requests so you can monitor your credit more carefully. Monitoring your credit report is the best way to protect yourself from identity theft. You can also get a sense of how creditworthy you appear to lenders, which will help you if you’re applying for a mortgage, auto loan, student loan or credit card.

How Long Does It Take To Arrive?

If you request your credit report online, you’ll be able to access the information immediately. If you order your report over the phone, you will receive your report within 15 days. If you order by mail, you will also receive your report within 15 days of receipt. In rare cases, it may take a little longer to process your request if your identity needs verification or if your file gets lost in the heavy sea of incoming mail.

What Information Do You Need?

To get your totally free credit report, you’ll need to provide some personal information, such as: your name, address, date of birth and social security number. If you have moved in the last two years, you’ll need to include your former address too.

What Additional Offers Should You Buy?

One in four Americans have a credit report containing serious errors that is limiting access to credit and favorable interest rates. If you find you are one of them, then you can dispute these errors with your credit bureau. Thankfully, the process has been simplified. You can write a credit dispute letter, phone the credit bureau or even click a “dispute” button online. The best part is that this service is 100% free!

In addition to receiving your free credit report, you’ll notice there are a few other optional services that credit bureaus offer. Credit monitoring is useful if you have been a victim of identity theft or if you feel at-risk for identity theft. For instance, Equifax offers credit monitoring at $14.95/month, where they agree to check your credit report more frequently at scheduled intervals and alert you to any suspicious activity (new accounts, late payments, etc) within 24 hours. You’ll also receive regular updates and graphics regarding your credit status, as well as $20,000 in identity theft insurance.

You can also place a security freeze on your account if you believe your personal information has been compromised. Once the freeze is in place, no new accounts will be opened and no information can be reported to the bureau during this time unless you notify them. This service can be free for identity theft victims or it could cost up to a $20 fee to place on your account.

You will notice deals to get a 3-in-1 report but these will cost extra if you order them through the same site. Instead of needlessly spending extra money, you should instead contact a free report through each individual bureau.

One credit bureau service that IS worth paying for is your FICO score. Currently, you can peek at your credit report information but you will not get the actual FICO number, which is what lenders look at to determine what interest rate to charge you and whether they can offer you credit at all. If you plan on buying a car, a boat, a house or another loan, you should request your FICO score. You may pay anywhere from $6 – $15 to view your actual score.

There are three American credit bureaus that hold your financial records: Equifax, TransUnion and Experian. They collect information about you regarding how you pay your bills, how many loans you take out, how you repay those loans and how risky a borrower you are.

If you wish to take out a mortgage, student loan, auto loan, small business loan, new credit card, rent an apartment or get a new job, your Experian credit report might be pulled so a third party can learn more about you. By law, your creditors need only report information to one of the three credit bureaus, so you may find information on your Experian credit report that isn’t on the other two and vice versa.

How Can You Get Experian Credit Reports?

Each year, you may request a free copy of your Equifax credit report, TransUnion credit report and Experian credit report – either all at once with a free 3-in-1 report or spaced out every few months, whichever you prefer. To get an Experian credit report, you can visit their website and fill out a form to view your data immediately online. You may also call to order a hard copy sent to you by mail.

How to Read an Experian Credit Report

When you get your first credit report, it may all look like mumbo jumbo to you. Why are there so many versions of your name listed? What does “CHARGEOFF” mean? What does it mean by “potentially negative information?” Why is the same account listed twice? Look at your report shrewdly, as 1 in 4 reports contain serious errors.

The first section is “Personal Header Information,” which includes your full name, report number and report date, which you’ll need for reference if you call Experian.

Then you’ll see your “Personal Information,” which includes your name, date of birth, social security number, current and previous addresses, phone number and current employer. You’ll want to make sure all this is accurate. Sometimes you’ll see several variants of your name because different creditors report things based on what they have on file.

The “Potentially Negative Information” may lead creditors to view you ask a risky borrower. Here you can see if there are any serious mistakes. You’ll see the name of the creditor, their address, your account number and status, the claim filed date and whether it’s been resolved.

The “Credit Items” section will show past and present credit accounts. You’ll see creditor names, addresses, account numbers and statuses, when the accounts were opened, what your limits were, what your monthly payments were, your most recent balance and whether the account was delinquent or not.

“Accounts In Good Standing” will let a creditor know you’re a trustworthy borrower. You’ll see all the same information – creditor name, address, type/status of account, monthly payments, balance and date opened.

“Requests For Your Credit History” will let you know who has been checking your credit report. Usually you’ll see mortgage lenders, credit card companies, potential employers and insurance companies.

There are also some abbreviated codes you may need to know to understand your report better. For instance, “CURR ACCT” means that your account payments are current and you’re in good standing. “CUR WAS 30-2” means your account is current but has been late 30 days twice in the past. “PAID” means your account has a $0 balance and is not active. “CHARGEOFF” means that an unpaid balance has been reported as a loss by the creditor, who has given up trying to get the money owed from you. “COLLECT” means an account is severely delinquent and was sold off to a collection agency. “FORECLOS” indicates a property foreclosure, “BKLIQREQ” indicates debt forgiven in bankruptcy, “DELINQ 60” shows an account 60 days delinquent and “INACTIVE” indicates an account that has not been in use.

How to Dispute an Experian Report Error

Chances are you’ll find something is wrong on your report. The most common credit report errors include: incorrect name confused with someone else or was outdated (54%), credit accounts that were closed but remain listed as open (30%), incorrect reporting of loan nonpayment (25%), listing of the same mortgage or loan twice (22%), lack of positive payment history on a major credit or loan account (8%) and accounts opened without your consent by an identity thief.

To dispute your report, you can dispute information online for free, which is the easiest and most immediate option. All you have to do is click a “Dispute this item” button and enter an explanation of why you think that information is incorrect or inaccurate. You may also phone them at 1-888-397-3742 or write them a credit dispute letter, mailing additional proof to verify your errors (if you have it) to: PO Box 9532 Allen TX 75013.

Once you submit your disputes, Experian will correct personal information errors and duplicate errors. They will also submit a request to your creditors for more information regarding your accounts. If, within 30 days, the creditor does not respond with verification of your debts, then the information will simply be dropped off your account! If the creditor does send in the necessary proof, then your account will remain the same and you will be provided with an in-depth explanation. Winning a credit bureau dispute is the quickest way to improve your credit score!

Why should credit card companies, mortgage lenders, auto loan establishments and prospective employers have access to your financial history if you don’t? This was the idea behind the Fair and Accurate Credit Transactions Act of 2003, which said you’re legally entitled to get a free copy of your credit report from each of the three credit bureaus each year (so that’s three in total). Some people choose to get them all at once so they can compare them side-by-side to check for inaccuracies, while others prefer to space them out over the year to monitor their credit for suspicious activities / identity theft or signs of gradual improvement.

To get your Equifax credit report, you may do so online or call to order at 1-800-685-1111.

What Is an Equifax Credit Report?

Equifax is a global company — headquartered in Atlanta, Georgia — that collects financial data regarding your payment history. This company has operated for more than a century and works with businesses and individuals to help people manage their credit and stay protected from fraud. As one of the three national credit bureaus, you can get a report from them to see what’s on your report that may open or close doors to capital for you. There are no real differences between an Equifax credit report, an Experian credit report or a TransUnion credit report, although you’ll commonly notice items on one report but not another because creditors need only report to one of the bureaus, not all.

How to Read an Equifax Credit Report

get an equifax credit reportAt the top of your credit report, you’ll see the company’s contact information and your personal contact information. Be sure the last three jobs and addresses are accurate here. Sometimes your name or social security number may have gotten mixed up with someone else’s so check for that error too. Next you’ll see a summary of your credit history, including the total number of accounts, accounts that are 30 / 60 / 90 days past due, accounts that have been paid off, the oldest account, the newest account, etc. Then you will see your Beacon scorecard and the reason for having such a low or high score. The following section will detail the accounts that are in collections, which is usually a negative thing. Public records like court judgments, tax liens, foreclosures and bankruptcies will appear next – if you have them.

On the far right of your report, you’ll see codes for your payment history. For instance, “N” or “0” means you have no balance on your current account. Past-due accounts are indicated by “1” (30 days), “2” (60 days), “3” (90 days), “4” (120 days), “5” (150 days) or “6” (180 days). Then there are some codes you definitely don’t want to see: “7” (Chapter 13 bankruptcy), “8” (Foreclosure, deed in lieu), “9” (Chapter 7, 11 or 12 bankruptcies), “G” (collection), “H” (foreclosure), “J” (voluntary surrender) or “K” (repossession). Commonly, when a debt has been canceled by the creditors who have given up on collecting from you, there will be a letter “L” to indicate a charge-off.

What is an Equifax Beacon Score?

All of the credit bureaus derive their scores from the same algorithm, but each has their own name. Experian calls theirs the “FICO score,” TransUnion calls theirs the “Emperica score” and Equifax calls theirs the “Beacon score.” To calculate your credit score, the bureaus look at: Timeliness of bill payments (35%), Outstanding Debt (30%), Length of time your credit’s been active (15%), the Type of credit you possess (10%) and How many new credit accounts you’ve opened recently (10%). If your overall score is over 750, you have excellent credit. At 720 or higher, you have very good credit, although 660 – 720 is considered acceptable for most loans. Anything lower is considered poor.

How to Dispute an Equifax Error

In 2004, a USPIRG study found that 79% of all American credit reports contained serious errors. In 2007, the Consumer Data Industry claimed that only 2% of the credit reports had data deleted due to error. Here’s a ray of light: If you find an error on your credit report, disputing it is quite simple! Before contacting Equifax, have your credit report handy with the Report Confirmation Number circled. (You’ll find this number at the top of your report and it will allow Equifax to access your credit file easily.) Even if you don’t have this number, you may dispute by phone or online.

You may need supporting documents when you dispute. For instance, if your name or birth date was incorrect, you’ll need to provide a copy of your driver’s license. If your address has changed, you’ll need to send in a utility bill with your name and address on it or a copy of your driver’s license. If your social security number is wrong, you’ll need to send in a W2 tax statement or a copy of your social security card. If you want, you can provide extra records to show why a certain piece of credit information listed is inaccurate, but this typically isn’t necessary, as the onus is on the creditor to validate the debt. The process may take 30-45 days, but at the end of this time period, you’ll receive a credit file update.