Credit and financial experts recommend taking advantage of your three free credit reports each year. You get one free credit report from each of the three credit reporting bureaus each year, but when should you pull those reports and what do you do with the information in them once you have them?
How to get your credit report:
Get your federally guaranteed free credit report from the annual credit request service, AnnualCreditReport.com. The Fair and Accurate Credit Transactions Act (FACTA) guarantees one free consumer credit report from each of three credit reporting agencies each year.
When to get your credit report:
• Stagger them for year-round free credit monitoring. Unless you are making a major purchase, suspect identity theft or are applying for a job, space them out every four months or so.
• If you are planning to apply for credit for a major purchase (like a home or car), check your credit to make sure that there are no errors on your record. If there was an error, after you get the mistake fixed, check your credit again to make sure that the mistake has been removed.
• If you applied for credit and were denied, you’ll want to check your credit report to find out why. Also ask the creditor with which you applied why you were denied.
• If you are applying for a job, especially one where personal credit is an important factor (like in the financial or government sectors), pull a report.
• Some states guarantee their residents more than the federal one per year per agency, for ongoing credit monitoring. If you live in Colorado, Maine, Maryland, Massachusetts, New Jersey or Vermont you get two reports per agency (six free reports) every year – so you can get one every other month. If you live in Georgia, you are guaranteed three reports per agency (nine free reports) - so you can check your credit report every six weeks or so.
How to get help with understanding credit and credit scores:
• Hire a professional to be your credit monitor. Some credit bureaus give you your score when you sign up for a monitoring service package.
• Try a free online score estimator. You anonymously answer key questions about your current and past credit, number of credit cards, home/auto loans, payment history, credit balances, etc., and you can get an estimate of your score.
• Take advantage of free advice. Credit counselors at national, reputable organizations can provide free advice and help you better understand your credit report. Check your local library, too, for credit counseling courses, programs or services in your area that can help.