Every US consumer is allowed one free credit report annually from each of the 3 credit reporting agencies. But unfortunately they do not give out a free credit score report. These agencies are Equifax, Experian and TransUnion, and they are the major reporting agencies in the US. They are used by virtually every financial institution, landlord and employment agency in the country. The information that these agencies have on record determines an individual’s creditworthiness and financial stability.
It is from these reports that an individual’s credit score is calculated using the FICO score model. Consumers can get a free credit score report online from one of the major credit report monitoring companies that shows a 3 in 1 credit score based on the information from the 3 major credit reporting agencies.
But, here’s the problem: The information from the 3 credit reporting agencies has to be checked very carefully for errors and irregularities. Why? Because the agencies all operate individually and the information could be wrong. This is important because this is the information used to calculate your score! The score the lenders use to check your creditworthiness!
Consider the fact that there could be errors in your report that are adversely affecting your score. And this is the score lenders are using to determine your interest rate. Therefore you could be paying too much interest on your mortgage and/or car loan! Could that be true for you?
There are millions of errors reported each year to the agencies, so it’s imperative that you check your report regularly. In a nutshell, this is what we recommend:
- Get your free credit score report to check your score – if it’s lower than you thought it would be, there is a good chance there are some errors;
- Pull your three in one credit report;
- Check your three in one credit report line by line, bureau by bureau to find the inconsistencies and errors – check that all the accounts listed are accounts that you have personally opened to make sure there is no fraudulent accounts;
- Report the errors with the respective reporting agencies and ensure they get resolved;
- Join up with a credit report monitoring service where you will receive email alerts every time there are significant changes to your report.
In essence, this is an excellent way to keep control of your score and to circumvent any identity theft attempt on your name. Here’s what this is all about: There are 10 million cases of identity theft reported in the US each year. Consumers have to become more aware of what changes are occurring on their reports as this has a direct impact on their score and the rate of interest they are incurring every month.