How Can a Credit Report Help You? Here’s What You Should Know

You probably have a credit report if you have ever applied for a loan or a credit card. These reports are held on file by the three major reporting bureaus: Experian, Equifax and TransUnion. Whenever you open a new card or apply for a loan, that information is sent to these reporting bureaus and added to your record.

Generally, the information contained on your credit history report shows how you manage your credit and debt. Consequently, the measurement known as a credit score is used to illustrate your creditworthiness. While each reporting bureau uses its own criteria to develop your score, you will want to have the highest number possible. Read below to learn how to get credit report information for yourself and discover the benefits of understanding your report.

When do you need to get a copy of your credit report?

You may want to request credit report information for yourself before applying for a new line of credit, which will result in your history being checked. Assessing your credit report is usually helpful when you do any of the following:

  • Rent a new apartment.
  • Buy a home.
  • Sign up for a new insurance policy.
  • Open a credit card.
  • Finance a new or used vehicle.
  • Apply for a personal loan.
  • Refinance existing loans, such as a mortgage or student loans.
  • Apply for certain types of jobs.

In most cases, lenders and other financial institutions who need to check your credit will obtain a report on your behalf rather than asking you to provide a copy. However, having your own copy can help you prepare for the outcome of any important application.

Landlords, insurance agents, mortgage lenders and other businesses may rely on credit reports and scores to determine if you are eligible for a certain product, service or interest rate. For that reason, you should always know what information your credit report contains.

If you find that your score is lower than you would like it to be, it is not always possible to improve it before a lender runs a credit check on you. However, knowing what your score says about you can give you a realistic idea of the rates, terms or services you may qualify for prior to applying. It also eliminates surprises you might encounter after applying for a new loan or account.

Learn About Paid vs. Free Credit Reports

You are entitled to a free credit report once a year through the Fair Credit Reporting Act (FRCA). Under this act, you can obtain your full credit report from a single bureau or get it from all three agencies at once. A free credit report obtained through this service is not much different than a paid report, since it contains the same information you would get from other sources.

If you want to access your full report more often, you may need to pay for it once you have utilized your free annual report. However, there are many options for getting a free report. Furthermore, if you simply want to get a free credit score, you can usually keep track of your number by using a monitoring service rather than paying for a full report every time.

3-in-1 Credit Reports Versus Single Bureau Credit Reports

A 3 in 1 credit report contains information from Equifax, TransUnion and Experian, rather than just one bureau. Because each bureau is a separate institution, the information they receive may differ.

It is helpful to know that credit reporting bureaus do not actually gather information themselves. Instead, banks, credit unions, mortgage providers and retailers report your information to these bureaus. There is no obligation for any of these entities to report consumer information to every bureau, or to report this information at all.

Besides the fact that each bureau gathers its own information, every bureau also uses its own formula for determining your credit score. For that reason, having all 3 credit reports is the best way to get a full picture of your current standing.

You do not need to get all three credit reports at once if you prefer to space them out. However, keep in mind that your credit may fluctuate over the course of the year, which may affect the information you receive.

What are the best credit report sites?

You can keep track of your credit reports and scores on various different platforms. Most of these platforms offer a variety of free services, as well as additional products and third-party offerings. The best credit report information comes from some of the following popular websites:

  • AnnualCreditReport.com – This website is the central location where you can obtain a free annual report from each of the three main bureaus under the FRCA. The best part of this website is that you can access your full record from each bureau. One drawback is that while a full credit report may be informative, it is not usually presented in a user-friendly format.
  • Credit Karma – This service provides access to your Equifax and TransUnion information for free. However, it does not allow you to access your Experian credit report at this time. Still, it is one of the most user-friendly and comprehensive websites for checking your score and getting basic information about your report.
  • WalletHub – Most services update your information on a weekly or monthly basis, but this website provides daily updates from TransUnion. Your TransUnion credit report is unlikely to change significantly from one day to the next, but it may be helpful to see which factors are affecting you in real time.
  • Bankrate – This website allows you to monitor your TransUnion information on a weekly basis. Through this service, your credit information is laid out in chronological order, which makes it easier to spot factors that affect your credit over time.

How can credit monitoring services help?

While checking your credit report on your own can help you stay on top of things, you may want to take it a step further by signing up for a monitoring service. The best credit monitoring services work in the background to notify you of important credit information and detect serious issues such as identity theft.

Some credit monitoring services are free, sending a basic summary to your email every week or month. Services with more advanced features usually require that you pay a monthly or annual fee. For example, paid services might include the following:

  • Protection from ‘the dark web.’
  • Identity theft insurance.
  • Regular access to information from all three reporting bureaus.
  • Real-time alerts for credit issues or suspected identity theft.
  • Notifications when accounts are opened in your name or public records are created with your name.

How to Improve or Repair Your Credit Using Your Credit Report

Perhaps the biggest benefit of knowing your credit information is that you can use it to set goals for the future. Credit reports and scores change over time, and there are several things you can do to make better progress. For example, you can work to improve your history by paying down high-interest debts, paying bills on time and keeping a healthy balance of debt to available credit.

If you want to repair your credit, it is crucial that you know where you currently stand. Therefore, make sure to check your report regularly and keep an eye on how your score changes over time. Overall, this is the best way to keep track of your progress and make real improvements.

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