The information on a credit report can help you make a plan to protect your financial information and improve your credit score, too.
Credit reports and credit scores go hand in hand: You can’t have one without the other. So what’s a credit report, why does it matter, and how can you use it as a resource to protect against identity theft and help improve your credit score?
What is a credit report?
A credit report is simply a moment-in-time snapshot of your credit history and outlook. It includes:
- Personal info: name, birthdate, address
- Summary of credit accounts: types of accounts (loans, credit cards, etc.), date opened, loan total/credit limit, current balance, payment history
- Inquiry info: both soft inquiries (checking your credit report, which doesn’t affect your credit score) and hard inquiries (when you apply for credit or loans, which may have a temporary negative impact on your credit score)
What might not be on your credit report? Oddly enough, your credit score. A credit score is a number that reflects your reliability or risk when it comes to things like paying back loans; that’s why checking a credit report for errors can have a direct impact on the accuracy of your credit score.
Tip: Very old accounts may drop off your credit history, depending on the credit bureau.
How to get a copy of your credit report
Good news: You can get a copy of your credit report once every 12 months—for free. Simply visit annualcreditreport.com to request a copy. When you receive it, check all the information to ensure it’s accurate. You can also request your credit report from a credit bureau; while there are multiple options, the biggest three are Experian, TransUnion, and Equifax.
If you find mistakes on your credit report, you have a couple of options. Start with the credit bureau: File a written dispute (search to see if they offer a form to use). You’ll have to send it and any documentation you have by mail; certified is best. Follow the same procedure with the lending company or business reporting the error. Finally, use resources at identitytheft.gov to report ID theft.
Why does a credit report matter?
Credit bureaus use the information from a credit report to create a credit score. If you forget to check your report regularly and there’s a mistake, it may impact whether you can secure new credit or get a lower interest rate, for example. (And lower rates equal lower payments and a lower cost of borrowing over time.)
One-third of people found at least one error in their credit report. 1
Employers and landlords may also check credit reports before hiring or renting to you. Importantly, reviewing a credit report can help you spot fraud or possible identity theft.
Now that you know how to read a credit report, learn what your credit score is, why it matters, and how to improve it.
Credit Bureaus noted are not affiliates of any member company of the Principal Financial Group®
This content is intended to be educational in nature and is not intended to be taken as a recommendation.