By Diana Palmieri
Honestly, how many of you have viewed your credit report? Have you done it in the past year? In the past five years? Ever? Is this you when you think of your credit report?
Did you know you can get your credit report online and free from these three credit reporting agencies--TransUnion, Equifax, and Experian? One of your year-end checkups should be to view this important information or at least make it a New Year’s resolution. If bad information is on your report that you are unaware of, it can affect how you get loans and good rates. Good things stay on your credit report pretty much forever. Bad things can generally stay on from anywhere between seven and ten years, with some exceptions. Like Santa and his list, lenders and creditors know if you’ve been bad or good.
I’ll give a personal example of how viewing my credit report helped me. I’ve had a retail store credit card since 1995. I received an e-mail from the store saying that I could view my account online and decided to check it out. What I did not realize is that by viewing my account online, I would also discontinue receiving paper statements, which I rely on to pay my bills. I’m the kind of gal who needs a tangible piece of paper to tell me to pay something. Anyway, I obviously did not receive a bill to pay about $125 I owed. The store mailed me a letter informing me payment was past due and hit me with a $25 late fee. I was mortified and immediately paid the balance with the late fee. Since I never made a late payment before and paid the bill in full, I thought nothing of this. A few months later, I viewed my free credit report. The first item on the page was this retailer showing I was a late payer! Let me tell you, when you are a late payer, it’s the first item and it’s in red, so it sticks out like a sore thumb! I immediately wrote to the retailer explaining how I inadvertently did not know I was receiving online statements, told them I paid the late bill immediately, and requested they remove that negative comment on my report. I also included in my letter that I have been a customer since 1995 and have never made a late payment. I received a response from them within a week with an apology, and they promptly removed the negative comment. I hope you are getting the point. A measly $125 late payment could have affected the future of all the loans and credit I applied for if I did not check this out.
A credit report is also valuable in preventing identity theft. A good friend of mine had her identity stolen, and it was a disaster. She told me she felt totally violated and never thought in a million years it would happen to her. It took quite some time for her to clean it up, and frankly I don’t think you really get over something like that. She wished she had viewed her credit report, as it would have told her about the accounts that were opened and when they were being used. To prevent future identity theft, credit agencies will allow you to put a fraud alert on yourself. Just by contacting one of the bureaus regarding your fraud alert, the other two agencies are notified so you won’t have to contact all three. Now when creditors are looking in your file to potentially extend you credit, there are steps they will have to take to ensure it is really you applying for credit. There are different time frames for fraud alerts, meaning how long they can stay on--some can go on your report for as little as 90 days all the way up to seven years. For further information on identity theft and consumer protection, you can visit http://www.ftc.gov/bcp/edu/microsites/idtheft/
So what do you do? The first step is to go to www.annualcreditreport.com
. This Web site was designed by the federal government to give you access to your credit report free annually. Since you are allowed a free report from each of the three credit reporting agencies, I would suggest staggering your reports throughout the year. This will allow you have constant access to your reports to see what is going on. So, for example, you could do Experian in January, TransUnion in May, and Equifax in November.
Be careful: There are advertisers that claim you can also have a “free” credit report, which usually entails enrolling in some sort of credit monitoring program. Also be aware of that fact that obtaining your credit score is not free. However, if you just applied for a mortgage or second mortgage, pursuant to the Fair and Accurate Credit Transaction Act (FACTA) of 2003, the lender must disclose your credit score to you in a timely manner. In some cases you can ask a lender for your score, which I did personally, since I had just applied for a car loan and was approved. They gave it to me with no problem. So, there are some ways you can access your credit score for free. The three big credit agencies also have three different credit scores for you, just so you are aware. You can visit www.myfico.com
for further study on credit scores.
I’ll discuss negative credit reports, disputing something that is incorrect, and building credit in my next column. There are plenty of people I know who filed for bankruptcy who have since emerged as good credit warriors, so don’t think there isn’t hope if your credit is less than perfect. Until then, please take a look at your free credit reports.
Diana Palmieri is dually registered with Vanderbilt Securities LLC and H Beck Inc., which are unaffiliated. Securities offered through Vanderbilt Securities LLC, member SIPC/FINRA/MSRB.