Action Steps
The best contacts and resources to help you get it done

Dispute errors found on your consumer credit report

Contact the providers of consumer credit reports and relevant lender(s) to file a dispute in regards to any errors you find on your credit check. When disputing an error, it is the consumer's responsibility to provide documentation to support the claim. If the item of dispute is found to be in your favor, the consumer credit reporting services are required to provide an updated credit report to you and anyone else that requested your credit report up to six months prior to when your dispute was filed.

I recommend: The Federal Trade Commission provides instructions and a sample dispute letter for you to reference when filing a dispute. All three credit reporting agencies, Equifax, Experian and TransUnion, have online dispute forms that consumers can complete if they prefer not to send a letter.

Enroll in a consumer credit report monitoring program

Credit report monitoring programs are an economical way to assist you in monitoring your credit reports held by all three agencies. These monitoring programs will alert you to any changes and/or report inquiries.

I recommend: Equifax Credit Watch Gold, TransUnion TrueCredit and Experian Triple Advantage monitor activity and provide individuals notification of any changes or activity to any one of their credit reports. To access Experian's Triple Advantage, scroll to the bottom of the page and click "Try it FREE."

Report unexplained activity on your consumer credit report immediately

Carefully monitoring your credit reports allows you identify any activity initiated by you in the form of loan or credit card applications. If new credit card accounts appear on your credit report, it may be indicative of identity theft. Alert the credit reporting agencies and your local law enforcement immediately.

I recommend: Review the information provided on Experian's Identity Theft Rights and TransUnion's Fraud Victim Assistance Department websites to learn what actions you can take in response to security breaches.

Helpful advice for making the most of this Guide

• •  Take advantage of financial education classes pertaining to consumer credit reports offered by your financial institution or community college. These courses will provide you a more in-depth understanding of how to use your credit report to your advantage by teaching you how your credit score is computed, what factors have a positive and negative impact on your credit score and various ways to improve your score.

Guide to Consumer Credit Reports

Make sure your credit history is the best it can be using your own credit report

By Greg Brown

Action Steps
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Learn the lingo on your consumer credit report statement

Although consumer credit reports can be long and quite complex at first blush, they are not impossible to understand. Besides basic identifying information about you -- employment, addresses and your Social Security Number -- there is a list of your credit accounts, both open and closed. Then information on how often you have asked for credit, and if you owe anything besides ordinary credit, like liens or judgments. All this together creates your FICO, or credit score.

I recommend: Discover how to read your consumer credit report with a credit report guide at TrueCredit.

Get your free credit report

As you might imagine, there are dozens of Web sites purporting to provide you with a 'free' credit report. Most try to suck you into paying a needless monthly fee for access to your own information. While not illegal per se (they are providing a faster service), most ordinary consumers can wait 30 days for a copy of their consumer credit reports in the mail from the credit bureaus.

I recommend: The only legitimate free credit report site is AnnualCreditReport.com. It was created by the three major U.S. credit bureaus in order to comply with U.S. law requiring a free credit report annually to all consumers.

Ask for changes in your consumer credit report if you find mistakes

It's good practice to ask for and then carefully review the free credit report you get to find any mistakes, like misspelled names, wrong addresses and, most importantly, accounts you don't remember or loans that appear open but you know are satisfied.

I recommend: The Federal Trade Commission suggests you do it in writing and even provides a sample letter. Each of the three credit bureaus, Transunion, Equifax and Experian, offers dispute resolution online as well.

Watch out for consumer credit report scams

Watch out for 'credit repair' agencies; for the most part, the work they do is simple and not worth what they charge. Some web sites that offer help with your consumer credit report are actually hawking alternative credit cards at usurious rates. Some, too, simply try to gather enough of your personal data to steal your identity outright.

I recommend: The Federal Trade Commission has a page on how you can legally improve your credit, on your own with no expensive outside help, as well as a good page on how to recognize credit report scams.

Helpful advice for making the most of this Guide

• •  Your FICO or credit score can be viewed on your credit report and is a calculation of your credit behavior. Improve your behavior, your score will rise. No one else can quickly raise your FICO score for you.
• •  If you decide to order a free credit report, lock it away or shred it once you are done reviewing it. Identity thieves would love all that data on you on one page.
• •  If a past debt is paid, your former lenders will happily provide a satisfaction letter if you request it, or otherwise inform the credit bureau and it will be taken off your credit report.

Action Steps
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Educate yourself on consumer credit reports basics

Learning credit score terminology, how your credit score is calculated and how to dispute discrepancies in your credit score can help you improve your credit score. Improving your credit score will make you more marketable to lenders and may result in lower interest rates on future loans.

I recommend: 101 Credit Report provides a comprehensive Credit Report Glossary than one can use to research terminology they are unfamiliar with. Credit.com offers information as to how your credit score is calculated, how your credit report may be used and how you can monitor your report.

Obtain your free business credit report

It is advisable to request a free business credit report from the three credit reporting agencies to allow you to compare your FICO scores. If one of them differs significantly from the other two, this will allow you to identify the problem and work with the reporting company to have the problem corrected.

I recommend: AnnualCreditReport.com allows you to receive a comprehensive credit report from all three providers of consumer credit reports. If you choose to receive your credit report from an individual reporting agency, you may contact Equifax, Experian and TransUnion directly.

Use credit reporting to protect yourself from identity theft

Reviewing your credit reports is only one way to protect yourself from identity theft. Other steps you may take include shredding documents that contain information such as a PIN or social security number and not keeping sensitive information (such as passwords) in your purse or wallet.

I recommend: The Federal Trade Commission and Fight Identity Theft explain measures you can take to avoid becoming a victim of identity theft.

Helpful advice for making the most of this Guide

• •  Consumers can utilize credit monitoring programs offered by the credit reporting agencies as a way to detect identity theft in its initial stages. For a monthly fee, the credit monitoring services screens the three major credit reporting agencies (Equifax, Experian and TransUnion) and alerts the consumer of any changes or activity such as account inquiries and new accounts on their credit report.
• •  Business credit information is not subject to the Fair Credit Reporting Act. Therefore, one should exercise caution on any offers to receive free business credit reports.

Action Steps
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FICO score

FICO stands for Fair Isaac Corporation, which is the company that created the idea of the credit score. A FICO score, or credit score, is a measure of a consumer's credit-worthiness, showing lenders the amount of debt an individual has, as well as past performance with other creditors. The full picture allows lenders to make a decision about lending.

I recommend: At the Fair Isaac Corporation, you can see what goes in a credit score. This helps you to know which areas you need to work on to build a higher credit score.

Experian, TransUnion and Equifax

Experian, TransUnion and Equifax are the three companies that create and maintain credit scores. The information at each of these companies may be different, so when you order your credit score, make sure that you look at the score from each of these companies.

I recommend: Learn more about Experian, TransUnion and Equifax from their company websites.

Forced continuity

When you order a 'free' credit report, you need to watch out for forced continuity programs. Typically, in a forced continuity program with credit reports, you must sign up for a free trial of a credit monitoring service in order to get your credit score. If you don't cancel, you will be billed monthly for this service.

I recommend: Ken McCarthy explains forced continuity and gives a good example of the process from a consumer's point of view.

Credit repair

Credit repair involves taking steps to improve your credit score. In most cases, in order to improve your credit, you'll have to pay your bills on time. However, if you find that there are mistakes on your credit report, fixing them can instantly improve your score. Consumers can do this themselves, and should be careful of scam companies offering to do this for you.

I recommend: The Federal Trade Commission offers advice on how to fix errors on your credit score.

Delinquent

A delinquent account is one where you have been late making payments. This shows on your credit report and negatively impacts the score.

I recommend: Bills.com explains delinquent accounts and how to remove them from your credit score.

Revolving and installment

There are two types of debts that credit companies list on your report - installment and revolving. Installment debts are those that have a fixed payment over a period of time, such as student loans, car loans and home mortgages. Revolving debt varies over time, such as credit card debt.

I recommend: DebtHelp.com explains the difference between revolving and installment debt.