Your Credit Report: Your Financial Well-being

  • Published
  • By 2nd Lt. Spencer Wood
  • 47th Flying Training Wing Legal Office
LAUGHLIN AIR FORCE BASE, Texas --  Now that tax season has come to an end, you can sit back and enjoy your tax returns in peace, right? No! There is one final step you should be doing to ensure your financial affairs are in order: get your yearly, free credit report!

We've all heard about credit reports and have been told that our credit history is being checked for large purchases, but what exactly is a credit report?

A credit report is a history of who you are, where you've lived, who you've worked for, and any credit accounts you've had with banks or other lenders. It also lists the names of anyone who's accessed your credit history in the last two years. A credit report may contain public record information, such as bankruptcies, tax liens, or convictions. The report shows any negative information for up to seven years, and bankruptcy information may be shown for up to 10 years!

A credit report is compiled by a credit bureau. A credit bureau, or consumer reporting agency, is a company that collects information from various sources about an individual's credit. The credit bureau then combines that information into a credit score or report that it sells to lenders, credit card companies, and other businesses. There are three major consumer credit bureaus in the U.S.: Experian, Equifax, and TransUnion. All three collect your information and compile it into separate reports and credit scores.

So what is your credit report used for? If you've ever tried to buy a house, lease a car, or apply for a loan, your credit history has been checked. Lenders use this information to determine your risk status and ability to repay a loan.

The content of your credit report is important to your financial well-being. For most people, there are no issues with their credit report. However, mistakes do occur and may cause an unfair blemish on your credit history and credit score. Also, your credit report can reveal suspicious activity or accounts that can be signs of identity theft. These are the true reasons why checking your credit report annually is so crucial. Remember, any negative information, valid or not, stays on your report for seven years! When an error occurs, you must take steps immediately to correct the problem.

First, contact the credit bureau that made the error directly in writing. Include the error along with any documents and information you can find that prove an error was made. Under the Fair Credit Reporting Act, the credit company is required to investigate your claim. This takes about 30 days. If they find that they have made an error, they will make the correction to your report and send you a new one. Contact the other two credit companies as well. While they might have slightly different data, there is a chance that they also have the same error.

If the credit company finds it did not make an error, you are not out of luck. Repeat the same process to dispute the error with the business that gave the credit company the false information. Again, write to them about the error and include all documents you have to support your claim. If the business finds it made an error, be sure to ask them to send the correction to all three credit companies to ensure the problem is completely resolved.

If, after completing these steps, you have not received confirmation of an error by the companies, you should next make your dispute official! You can write a 100-word letter that will be added to your file stating that you think there is an error and give the reason for it. While the error won't come off your record, your letter will present your side of the story and show that you made an effort to correct the error.

As you can see, it's really important to check your credit reports. Fortunately, requesting your report is simple. You can visit www.annualcreditreport.com, call 1-877-322-8228, or complete the Annual Credit Report Request Form and mail it to:

Annual Credit Report Request Service
P.O. Box 105281
Atlanta, GA 30348-5281

You can order a report from all three companies at once, or one report from each at different times of the year.

For further questions on credit reports or identity theft, contact the Laughlin Legal Office at 830-298-5172.