The information on your credit reports is compiled by the three credit bureaus (Equifax, Experian and TransUnion) to help lenders discover whether you are a credit risk. Your credit reports could show previous and existing loans, late payments, wage garnishments and credit inquiries. These are only a few examples of what might be contained within the reports. If your credit reports show a history of defaulting on loans, late payments or judgments, then it will be much more difficult to access credit.
Our entire society runs on credit, so it is important to know what information is contained within your credit reports. Once you have this information, you can contest errors or develop strategies to repair your finances. Fortunately, are owed a free credit report each year from the three credit bureaus.
How Does AnnualCreditReport.Com Work?
The three credit bureaus operate AnnualCreditReport.com, the only website where you are guaranteed free access to your credit reports each year. Our step-by-step instruction manual may help you figure out the basics of using this website.
Step 1: Before getting started, make sure that you are on a secure internet connection. It would also be wise to perform a full disc virus and spyware scan with antimalware software. If identity thieves have access to your computer or network, then they could steal most of your personal information.
Step 2: You are going to need to pull an encyclopedia’s worth of personal information from your records. For example, you may need to provide the website with the make and model of a car you owned more than five years ago. AnnualCreditReport.com is likely to ask you about specific financial information, such as the amount of your monthly mortgage payments. There is no way to predict what AnnualCreditReport.com will ask to verify your identity throughout this process. Gather as much personal information as possible beforehand.
Step 3: After typing in basic personal information, the website will ask you to select which credit bureaus you want your reports from. Request credit reports from all three bureaus. The reason why is because credit bureaus list different information on these reports. For example, sometimes past due bills or defaults are listed with one bureau but not the others.
Step 4: This is the tricky part. The website is going to ask you to answer detailed personal questions. You will have to answer these questions correctly for each credit bureau. Do whatever it takes to get the answers correct. If you get them wrong, then you will have to call the credit bureau and finish the process over the phone. Although it may be extremely annoying, AnnualCreditReport.com asks these questions to prevent identity theft.
Some people will be unable to answer the detailed questions required by AnnualCreditReport.com. You can also request a copy to be sent through the mail. Unfortunately, it could take more than two weeks before you receive your reports. This is also not information that you would want to risk being lost in the mail.
What Information Is on My Credit Reports?
It is not an easy task to understand the detailed information on your credit report. The reports provided by the three bureaus each year describe your financial existence in the US. Your reports could contain late payments, existing loans, bankruptcies, wage garnishments, credit inquiries and collection accounts.
However, the reports may also contain accounts that you did not authorize. Many people pull their credit reports to spot identity theft. There may also be information that should have fallen off your credit reports after seven or ten years. Some information may be false, such as a bill that was paid on time that got sent to a collection agency. This is the type of information you can contest with the credit bureaus. Once they drop off your report, your credit score could improve.
Are Poor Credit Scores a Big Deal?
If you have negative information listed on your credit reports, then you may also have a poor credit score. Having a poor credit score can hurt your ability to find certain jobs, rent an apartment, lease a car or take out a business loan. However, none of this matters in the long-term. Credit scores are not permanent. However, your score will only improve if you show lenders that you have financial stability.
Pay your bills on time, avoid overspending existing lines of credit and never take on more debt without creating a very detailed budget. A good budget will also reflect possible future events, such as how much money you would need saved to satisfy existing debt obligations after a job loss or illness.
The Sader Law Firm has a long history of helping people in Kansas City repair their finances. If you are struggling debts want to discuss relief options with an attorney, then please pick up the phone and call us. We get that sometimes making that first call is difficult. Many people who are struggling with a difficult financial situation feel shame. The longer you wait to talk with a professional, the worse your situation may become.