Exercise 3.3B: Your Credit Report

The purpose of this assignment is to 1) help you identify and better understand the various factors that determine a credit score and how your use of credit will affect your credit score and 2) evaluate how you are doing in managing credit by reviewing your credit report.  Before completing this assignment, be sure to watch video "Understanding How a FICO Credit Score is Determined'  and the 2-page fact sheet "Understand Your Credit Score (CFPB)".

This part of the assignment is to evaluate how you are doing in managing credit. Since credit evaluation and credit scoring are important tools in the acquisition of a home and other important purchases, it is important that you understand where you stand. For this part of the assignment you will get a copy of your credit report, review it, and answer questions about what you learned about your credit report. There is a short video (2 minutes) about ordering your Credit Report.

Step 1. Obtain a copy of your credit report. If you are from the United States, you can, by law, obtain one free copy of your credit report each year from one of the major credit report suppliers (Experian, TransUnion, or Equifax). Go to www.annualcreditreport.com and supply the necessary information. Alternatively, you can call (877) 322-8228, or download and complete the Annual Credit Report Request Form. You will select one of the major providers and input the necessary identification information, and the credit reporting agency will provide you a copy of your credit report online. In some cases you may have to mail away for your credit report. This will take about 4 weeks. Please let me know if this is the case. Beware of other websites offering free credit reports. Some companies offer free credit reports, but you may have to buy another product or service to get it. 

While the annualcreditreport.com website is secure, you should avoid accessing it on a public computer or over an unsecured wireless (wifi) Internet connection, because of the sensitive, personally identifiable information (such as your social security number) that the site will ask you to provide. Requesting your free annual credit report will NOT affect your credit rating. During the request process, you’ll be asked to answer a number of identity verification questions. This can be a little tricky; so, it may help to have access to your financial records. You need to provide your name, address, Social Security number, and date of birth. If you have moved in the last 2 years, you may have to provide your previous address. To maintain the security of your file, each credit reporting agency may ask you for some information that only you would know, like the amount of your monthly mortgage payment. Each company may ask you for different information because the information each has in your file may come from different sources.

Step 2. Review your credit report. Once you have your credit report, read it thoroughly and ensure it is accurate. Check that it contains only items about you. Be sure to look for information that is inaccurate or incomplete. Some common errors in credit reports are: 

Identity errors

• Errors made to your identity information (wrong name, phone number, address)
• Accounts belonging to another person with the same or a similar name as yours (this mixing of two consumers’ information in a single file is called a mixed file)
• Incorrect accounts resulting from identity theft

Incorrect reporting of account status

• Closed accounts reported as open
• You are reported as the owner of the account, when you are actually just an authorized user
• Accounts that are incorrectly reported as late or delinquent
• Incorrect date of last payment, date opened, or date of first delinquency
• Same debt listed more than once (possibly with different names)

Data management errors

• Reinsertion of incorrect information after it was corrected
• Accounts that appear multiple times with different creditors listed (especially in the case of delinquent accounts or accounts in collections)

Balance Errors

• Accounts with an incorrect current balance
• Accounts with an incorrect credit limit

What to do if there is an error on your credit report: If you find errors, you should contact the credit reporting company who sent you the report, and the creditor or company that provided the information (called the “furnisher” of the information). Your credit report includes directions about how to dispute inaccurate or incomplete information. Additionally, there is a resource developed by the Consumer Financial Protection Bureau that is posted in the Credit module. Refer to this guide “Credit Report Dispute”, it provides information and tools you can use to dispute information in your credit report.