What is in the file
Three companies, Equifax, Experian and TransUnion, each keep a separate file on you, and the three do not always match, because lenders are not required to report to all of them. Each report has four parts. The first is identifying information: names, addresses and employers. The second is the list of accounts, with the opening date, limit, balance and a month-by-month payment record for each. The third is inquiries. The fourth is collections and public records, which today means bankruptcies. Your income and bank balances are not there, and, strictly speaking, neither is your score, which is calculated from the report on demand.
How long things stay
Late payments, collections and most other negative entries remain for seven years from the first missed payment. A Chapter 7 bankruptcy remains for ten. Hard inquiries, the kind created by applying for credit, stay for two years. Accounts closed in good standing stay for about ten years and continue to help you. Checking your own report is a soft inquiry and never affects your score.
Getting and reading it
The only federally authorized source is annualcreditreport.com, and the three bureaus now allow free checks there as often as weekly. Read each report for these things.
- Look for accounts or addresses you do not recognize, which can be the first sign of identity theft.
- Look for payments marked late that you made on time.
- Look for the same debt listed twice, often once by the original creditor and again by a collection agency.
- Look for hard inquiries from lenders you never approached.
Disputing an error
File the dispute with each bureau that shows the mistake, online or by certified mail, and attach copies of whatever proves your point, such as a bank statement showing the payment. The bureau generally has thirty days to investigate and must report the result in writing. Send the same dispute to the company that furnished the information, since it has its own duty to correct it. If a legitimate dispute is rejected, complain to the Consumer Financial Protection Bureau.
Freezing your file
A security freeze stops anyone from opening new credit in your name. It is free by federal law, takes a few minutes at each bureau, and does not affect your score or your existing accounts. Lift it temporarily when you apply for credit yourself.
Tip Set a recurring reminder and pull one bureau's report every four months. Rotating through the three gives you year-round coverage for nothing.
