Checking your credit report is crucial to keeping an eye on your financial standing and protecting yourself from identity theft, and doing so will make no positive or negative impact on your credit score if you're doing it through the right avenues. From buying or renting a house to getting a job to acquiring new credit, many important decisions are based on your credit score. Educating yourself about which credit report requests will and will not affect your score will keep you from damaging your credit.
Checking Your Own Score
Looking at your own credit report is called a "self inquiry" and won't positively or negatively impact your credit score. According to financial columnist Teresa Dixon Murray, "Obviously, you're not checking your report to see whether you should lend yourself money. So it's not an official inquiry." The three credit agencies, Equifax, Experian and TransUnion, all allow you one free credit report per year under the Fair Credit Reporting Act. To check your credit report, you may go to each agency's website individually, or get a report through the AnnualCreditReport.com website run by the FTC.
Requests Through Other Credit Check Companies
If you request a credit check through another credit reporting company, it could count negatively against your score. The three credit bureaus and the government's official credit reporting website are the only places that can provide you with a risk-free credit report. The Federal Trade Commission warns against using other websites that offer "free credit reports," which may ask for other information or trick you into paying for ongoing services. According to the FTC, AnnualCreditReport.com and the three credit bureaus are the only organizations legally included in the Fair Credit Reporting Act.
Credit Inquiries for New Credit
Each time you apply for a new line of credit, an inquiry is made into your credit history and score. Although the negative impact is generally small, many third-party inquiries raise a red flag for lenders. According to Craig Watts, spokesman for Fair Isaac Corporation, "Statistically, a person whose credit report shows she has applied for new credit six or more times in the past 12 months is eight times more likely than other consumers to file for bankruptcy." By checking your own credit score through the individual bureaus or through the FTC's AnnualCreditReport.com website a few times a year, keeping your score up by paying bills on time and keeping balances low and limiting the number of accounts you open, inquiries for new credit will be worthwhile and not subject to rejection.
Errors
Under the Fair Credit Reporting Act, it is your responsibility and the responsibility of the credit bureaus to fix any errors that are on your credit report. If you see an error, you must inform the credit reporting agency in writing to request an investigation into the discrepancy. Once your issue has been investigated, the agency will send you a report of its findings. If the agency will not correct your dispute, you may ask for a statement about the issue to be included in future reports, but this service usually includes a fee.
Negative Information
Negative information can stay on your credit report for seven years, with information pertaining to bankruptcy listed for 10 years. This information is available to anyone who is legally entitled to view your report, including creditors, landlords and insurance agencies. Your employers may view your report if you grant them access.
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