Credit Check Guide

Landlords, lenders and prospective employers sometimes run credit checks on applicants to get a better understanding of their desirability as a tenant, borrower or employee. Credit checks contain different types of information adding up to a picture of your ability to manage credit based on your payment history, debt volume and other factors. Misconceptions about how to access, improve or correct credit check information abounds, so reviewing credit check guides helps you better understand how credit checks work.

Types

Credit checks fall into two categories: single credit bureau reports and three-bureau reports. Single-bureau credit checks reflect the financial information gathered from one bureau, either Equifax, Experian, or TransUnion. Ideally, financial information from all three bureaus should be the same, but it sometimes happens that the three bureaus have different information about the same person. Credit checks from all three bureaus will include your entire credit history.

Access

You're entitled to access your credit report free each year under the Fair Credit Reporting Act, enforced by the Federal Trade Commission. Accessing your credit report helps you prepare for outside credit checks, because you can identify and correct (or remove) incorrect information, or take steps to mitigate negative marks on your credit resulting from lapsed payments, collection agency referrals or other credit mismanagement errors. Running your own credit check helps you determine whether you're a victim of identity theft; if unfamiliar accounts or addresses appear on your credit report, someone may be illegally accessing your credit. If you'd like to run your own credit check, complete an online application at annualcreditreport.com. Otherwise, call 1-877-322-8228.

Credit Score

Some consumers access their credit report to learn their credit score, although the score doesn't appear in all credit checks. Your credit score reflects a variety of factors, including the volume of your debt, payment history, number of credit accounts opened and length of relationship with credit lenders. If you've managed credit well by maintaining long relationships with your credit card lenders, made on-time payments, paid your balance in full each month or paid more than the required minimum, you might have a high credit score. Missed payments, spotty relationships with lenders or delinquent debt may earn you a low credit score.

Risk

Frequent credit checks can hurt your credit score, since it can indicate that you're turning to numerous sources for additional credit in the form of credit cards, lines of credit or personal loans. When running credit checks through outside websites offering free services, you also run the risk of visiting imposter sites not affiliated with the U.S. government-sanctioned annualcreditreport.com. These websites may offer free credit checks, but require that you sign up for fee-related monthly services in exchange. Read online forms carefully before submitting to avoid surprise charges on your credit card bill.