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While there are dozens of other credit information collection and reporting firms that analyze and sell information about consumers for other purposes, most U.S. consumer credit information is collected and kept by the three national credit reporting agencies:  Experian, Equifax, and TransUnion.

Equifax Credit Information Services, Inc. www.Equifax.com
Experian: www.experian.com
Trans Union: www.transunion.com

Each credit reporting agency calculates a credit score for you, and they aren’t always the same.  Even though all of the credit bureaus use the same criteria to judge your “credit worthiness” and often come up with similar scores, the actual scores can vary because the agencies have different information and may analyze it slightly differently.

It’s important to remember that people who put the information into the computers aren’t perfect and mistakes can happen when entering the information into your file – that’s why you need to review your report periodically.

By law you can request a free credit report from each of these credit bureaus once every 12 months.  Another place to get it is Annual Credit Report Request Service. AnnualCreditReport.com is a centralized service for consumers to request free annual credit reports. It was created by the three nationwide consumer credit reporting companies – Equifax, Experian and TransUnion.

The Federal Trade Commission mandated by law that everybody is allowed free access to these reports annually.  You should take advantage of this opportunity to look over your credit report. You may spot errors that may be unfairly lowering your credit score, that can hurt your ability to borrow money. Some credit card companies report the wrong information to the credit bureau and that can have a negative effect on your score.  So, it’s possible to have no late payments and still have problems to qualify for loans.

While you can get your credit report once a year at no charge, you usually will  have to pay for your actual score (usually around $15), and/or subscribe for an ongoing service. The good news is that you don’t really need your score as long as you regularly review your report and make sure there are no errors or problems.

Once you receive your report, examine all the reported information.

What information can you find in your report?

Some of the information that is provided includes:

  • which bills you pay on time or don’t pay on time
  • your employer information
  • any bankruptcy within the last ten years
  • your child support agency
  • list of accounts that you have had open for the last seven years and the dates the accounts were opened and closed.
  • whenever you ask for credit and your request is denied
  • high and low balances on consumer accounts, interest rates on these accounts,  payment amounts,
  • and other

The first thing to look at is any negative items that are over seven years old. Except for a bankruptcy, which stays in the file for ten years from the date of discharge, other things can generally be challenged and removed. There may be closed accounts or accounts showing late payments when in fact, they never were. There could be debts of your former spouse, accounts which aren’t yours or civil judgments that aren’t yours.

Another thing to look for is recent requests to open accounts or credit inquiries that were not initiated by you. This could be a sign of attempted identity theft. It’s estimated that up to 50% of the files have at least one error.

Remember accounts showing inaccurate information usually simply means information was entered wrong into the computer.

When you visit the credit reporting agencies websites, you will find lots of resources to help you keep your report accurate.  The websites explain how to read and analyze the reports and how to contact them, if they contain information that you want to dispute.

The Fair Credit Reporting Act gives consumers the right to review and challenge the items in their reports. Challenge every item you don’t agree with. When challenging items in the report, it’s best to do it in writing, via registered or certified mail, and keep a copy of the letter. Credit agencies are required by law to prove the accuracy of the information within 30 days. If they are unable to do so, the item must be removed.

The agencies will help you in correcting any errors and making your file as accurate s possible. They are not involved in decisions to give credit or deny credit, because it’s not their role to evaluate the data. They just collect and report information to current and prospective creditors, as requested.

Read more about credit score ranges on this blog.