Your Credit History is Important!

By Maureen Carrington

Maintaining or improving your credit history is a great way to make sure that you are getting the lowest possible interest rates available — on credit cards, mortgages, car loans, or a home equity line of credit (HELOC). The credit report is used to compute your credit score. The higher your credit scores, the better.

One of the issues with credit reports is that they may contain inaccurate data that is causing your score to drop. These inaccuracies can happen accidentally when somebody else’s information with a nearly identical name or Social Security Number to yours is mistakenly entered on your report. Or they can happen when you are the victim of identity theft.

Identity theft is the term used when somebody applies for or uses your personal information to obtain or use credit fraudulently. The criminal can open accounts in your good name and run up large balances.

Obtaining a copy of your (and your spouse’s) credit report is the best way to make sure that the information in the report is correct, and that there are no unauthorized uses of your credit. Thanks to federal legislation enacted in 2005, anyone can get one free copy of his/her credit report per year from each of the three main credit reporting agencies: Experian, Equifax, and Trans Union. To get your free copy, visit www.AnnualCreditReport.com and follow the easy steps online.

AnnualCreditReport.com is the only site where you can get a truly free copy of your credit report. While you may see and hear advertisements about other sites that claim to you a free report, those other sites also make you join a credit monitoring service with a monthly fee. Don’t fall for their ploy. This website was set up by the three credit reporting agencies, and it’s free!

Since each agency is required to allow you one free report per year, simply request a single report at a time at four-month intervals. (Requesting them all at once would mean an entire year could go by before you discovered a problem.)

Here’s an example of how you would do it. In January of 2008, log onto the AnnualCreditReport.com site and obtain a report from only one of the three agencies. In May, go back to the site and order the report from a different agency. Then order the report again in September from the last remaining agency. In January of 2009, go back to the first agency and repeat the process throughout the year.

When you get your reports, read through them to make sure that the information is correct. If you find mistakes or think you see unauthorized uses of your credit, contact the agency immediately to take care of it!

[Maureen, a licensed mortgage provider for Month-Off.com and a new at-large member of the NFCCA Board, has offered free assistance to NFCCA members who need help interpreting or fixing any mistakes on their credit reports.] ■