A credit report is a record of your borrowing and repayment history from the last seven years. Credit bureaus use the data from your credit report to calculate your credit score. Negative information on the report will lower your score, making it difficult and expensive to borrow money. If you find a mistake on your credit report, you should fix it as soon as possible to avoid ruining your credit history.
Credit Report
A credit report is a record of your borrowing and repayment history. In reality, you have not one but three credit reports. Each of the credit bureaus -- Equifax, Experian and TransUnion -- compiles its own report. Much of the information will be the same across all three, but it may differ slightly as not all creditors report to all the bureaus. When you check your credit report, be sure to check with all three bureaus.
Information
A credit report includes a lot of information about you and your finances. It includes personal information like your name, Social Security number, date of birth, address, driver's license number and possibly a record of employment. It also includes all of your borrowing and repayment activity from the last seven years, including balances, missed payments and defaults. If you've filed for bankruptcy in the past 10 years, it'll be on your report, along with court judgments and liens.
Checking Your Credit Report
You can get a free copy of all three credit reports from AnnualCreditReport.com. This is the only website authorized to issue the reports. Do not be fooled by copycat sites, which may be trying to steal your money and identity. You can also get the reports separately by going directly to the credit bureaus' websites.
Errors
When you get your credit report, go through each line to check for errors. If you find an error, get it fixed as soon as possible. It could just be a typo, or it could be a sign of identity fraud. To fix the mistake, file a claim with the bureau through its website. You may need to provide evidence to support your claim, such as receipts and canceled checks. The bureau will investigate and make a ruling within 30 days and fix any incorrect information.
What to Fix First
If you see any accounts on your credit report that you don't recognize, deal with those first. They could be a sign of fraud. It can take years to sort out identity fraud issues. Next, fix any mistakes that relate to settled accounts. If you've settled a debt year ago, but it still shows up as unpaid on your credit report, it could be hurting your credit score. File a claim with the bureau, then contact the lender and ask to have the record updated. When you've dealt all of the major issues, try to fix small mistakes, such as typos. Even a small mistake can hurt your credit score.
Negative Information
If you have negative information on your credit report that's accurate, you cannot erase it. You can only fix mistakes. You will have to wait until it expires automatically after seven years (10 in the case of bankruptcies). If you maintain a good repayment record for several years, the older negative information will matter less and not affect your credit score as much.
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