Your credit history has a lot of influence on your financial life, from whether you can rent an apartment to the interest rates you pay on loans. So keeping tabs on your credit record is important to do.
Thankfully, it’s relatively easy to get your credit reports and scores for free. The problem: Many 20-somethings are not sure where to look.
A survey done this year by Credit.com found that nearly 40 percent of millennials don’t know how to get their credit reports. And research by the Consumer Financial Protection Bureau has found that among all age groups, some consumers are confused about how to check their credit reports and scores and what the information means.
For help on how to get started, Gerri Detweiler, director of consumer education at Credit.com, offered this advice.
Begin with the big three credit bureaus. More than one credit reporting agency collects information about you and calculates your credit score. To make matters even more complicated, the bureaus don’t always have the same information.
So if you’re checking your credit history for the first time, Detweiler suggests pulling reports from the three main bureaus — Equifax, Experian and TransUnion — all at once.
“The bureaus don’t share information with each other. If there’s a mistake on one, you won’t know that there’s a problem if you pull just one report,” she said.
If a bureau doesn’t have a file on you it means you have no record of using credit. While that’s OK for now, in the long term you need a credit report to take financial steps, such as getting a car loan or buying a home.
“Statistics show that more and more young people are not getting credit cards, which doesn’t allow them to start building a credit history,” Detweiler said. “If you don’t have a credit history, now is the time to open a credit card and find a way to use it responsibly to build a file.”
By law, you’re entitled to receive a free copy of your credit report from Equifax, Experian and TransUnion once every 12 months. To get yours, go to AnnualCreditReport.com.
Get your score. Your credit score is not included with your free credit report. But you have a number of ways to get a score at no cost.
More than a dozen credit card issuers, for one, offer free credit scores to cardholders. Look for it on your monthly statement or sign up to receive your score when you log in to your account.
Lenders must also provide you with a free score if you’re denied a loan or given a higher interest rate than what’s advertised. Mortgage lenders have to provide your score when they check your rating to approve a loan.
You may also get a free score through certain credit monitoring services. Just be warned: If the program asks for your credit card information, your score may be “free” only for a trial period.
“You will be charged if you don’t cancel after a certain period of time,” Detweiler said. She also warns against clicking any links for free credit monitoring offers in your email. These may be scams and could lead to your identity being stolen.
“Always go directly to the website of the company or bank that’s offering the service,” she said.
Finally, keep in mind that just as you can have various credit reports, you can also have different credit scores. In one model, the best score may be 850, while in another the top score is 990. Depending on which is being used, a score of 800 will have different meanings.
“A lot of services will give you an idea of how you rank next to other consumers. See how you compare,” Detweiler said. “And if you’re interested in improving your credit, make sure to look at the same score each month.”
ABOUT THE WRITER
Carolyn Bigda writes Getting Started for the Chicago Tribune. firstname.lastname@example.org.
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