Remember getting a report card as a kid? Think about how excited you were to show off your grades to mom and dad (or maybe not) because it reflected your hard work. Even though your grades were acceptable, perhaps there were a few things your teacher wrote in the comments section that you didn't want your parents to see.
Your credit score gives lenders an overall picture of how well you're doing in the school of personal finance, but your report gives the specifics. Think of your credit report like the comments section of your adult report card. This document describes how you handle your money and the money that is available to you.
We've given you tips about factors that affect your credit score and the basics of what things make up your score. So as long as you've got a good score there's nothing more you need to do, right? Well, let's take a step back and focus on what's on a credit report.
Your Free Credit Report
Remember when we told you that you're entitled to one free credit report every 12 months from each credit-reporting agency? Well what do you do with this report once you have it? Take the time to go through this document and make sure that everything is correct. It's important to focus on your report because agencies use this information to calculate your score. So naturally, a polished and accurate report can lead to an increased score.
Credit-reporting agencies are not required to give you your credit score, just your report.
Reporting Errors on Your Credit Report
One of the simplest ways to improve your credit score is to go through your credit report and make sure that everything is accurate. Your report should only contain information about you, meaning there should not be any facts about your family members or spouse listed. When you're flipping through your report, keep an eye out for these common errors:Accounts that do not belong to you or that you were not an authorized user on
Addresses that you no longer live at
Names of employers you did not work for
Accounts that you closed (if the report says they are still open)
Bankruptcy that is more than 10 years old
If something doesn't look right on your report, you'll need to contact the credit-reporting agency and the company that's reporting the incorrect information. You can usually fix any discrepancies by submitting a dispute online or by mail. Just explain what you think is wrong and provide any copies of documents that might support your case. Contact information for each credit-reporting agency is available at the Consumer Financial Protection Bureau*.
Credit Repair Agencies
If there's something wrong on your credit report, it can take a while to fix the problem. Credit clinics, or places that claim they can clean up your report for a small cost, like to take advantage of this issue. Most of the services that credit repair agencies provide can be done on your own for free.
Credit clinics often end up charging you a great deal of money and in some cases they are a front for scams. This doesn't mean that all credit repair agencies are scams, but you need to look out for the warning signs of a potential scam, especially if you are considering giving out your personal information. Signs of a dishonest company include:
- Asking for money before any services are provided (this is illegal)
- A fictitious or non-existent business address
- A guarantee to remove late payments or bankruptcies from a credit report
- Asking you to dispute information on your report that is actually correct
We know, sometimes being an adult is no fun. But having good credit is the key to your financial future. A clean report and a good score can help you get the loans that you want at great rates. Plus if your employer or landlord ever views your report, they'll get a great first impression of how responsible you are.
*Information compiled from the Consumer Financial Protection Bureau Ask CFPB web page. Third party website. Lake Trust Credit Union is not responsible for the content, availability, security or compliance of any linked third party websites. In addition, the site's privacy policies may differ from those of Lake Trust.