You’ve heard about how important your credit report is to your buying power. You know you’ve made a couple of credit mis-steps in the past, but you have never seen your credit report. Would it surprise you to know that negative entries on your credit report may come back to haunt you in ways you never imagined? More and more companies are hiring new employees based, in part, on what shows up on those credit reports. If an employer is hiring for a position which has fiscal responsibility, you can be almost sure that a credit report will come into play. Even when the person being interviewed will not handle money directly, some companies are still concerned about the credit-worthiness of potential employees. They may reason that employees who do not handle their own assets appropriately will be more likely to mishandle company assets. They may also reason that if an employee is in trouble financially, he or she may be more likely to misuse a company credit card for personal expenses.  

 

Let’s suppose that you’ve always paid your credit card bills on time. Yet, when you go to apply for a loan of some kind, you are told that your credit score isn’t high enough, and you can’t qualify for the loan you want at a favorable interest rate. Would it surprise you to know that those 14 overdue library books you have in the trunk of your car are impacting your credit report? It’s true. Some library systems do report unpaid fines to credit bureaus. How about your unpaid parking tickets? You have 3 or 4 of them, and they amount to less than $100 total. But they could be costing you far more than $100 if they show up on your credit report. Not only will you not qualify for attractive lending rates for new loan products, you may find your less than stellar financial performance impacting existing lines of credit. That’s because your current creditors also check your credit report from time to time, and if they don’t like what they see, they may move you to a higher risk category and raise your interest rate. 

 

So there really are several excellent reasons for you, as a consumer, to be quite sure you know what is on your credit report. How can you find out? Believe it or not, it’s quite simple. There are three major credit reporting agencies, and those three agencies generally have similar data on you in their files. The three agencies are Experian, TransUnion, and Equifax. There are also dozens and dozens of smaller local credit reporting services, but these “big three” are the primary sources for credit reports businesses, lending institutions, and other credit grantors use. In the past, all three may have charged you for sharing that data with you. You will be pleased to know, however, that today you can obtain a TOTALLY FREE copy of your credit report, no strings attached, at https://www.annualcreditreport.com. Once every year you are entitled by law to this free service. When you access this site, you will be asked to enter the state in which you live. Then follow the prompts to enter your information and receive your free credit report. 

 

So, what happens when you receive your credit report? What if there are things on it you don’t understand? If you are unable to decipher the report yourself, consider making an appointment with an officer of your credit union to explain the report to you. 

 

Now, let’s say that you understand the entries on the report, but you know that some of the information on the report is incorrect. You do have a right to challenge the information on your credit report. As an example, I bought a home in 2001. But my credit report showed a “collections” account with a cable company in the last town I’d moved from. Fortunately, I had a cancelled check which proved I did not owe the money; yet it still appeared on my credit report. My next step was to contact the three major credit bureaus, in writing, to inform them of the incorrect entry on my credit report. They are required to investigate the incorrect entry and to communicate to the consumer the results of their investigation. Why go to all this trouble? Well, even one unfavorable (even if incorrect) entry on your credit report can adversely impact your credit score---which MAY adversely impact the information provided to prospective employers, prospective landlords, and to your current creditors. What could be more worth your time?