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Reviewing your credit report regularly is a good idea, but it is a particularly important to do so before making a large purchase such as a home. Even if you always make your payments on time and have a low level of debt, your credit report could contain unexpected errors that can impact your credit score.
If you review your credit annually, check your report at least 60 days before you plan to apply for a mortgage, as it can take some time to resolve issues. If you haven’t seen your credit report in longer than a year, then you should review it about six months before applying for a mortgage.
Your credit report tracks your credit-related activity. Types of credit include credit cards, store cards, personal loans, car loans, mortgages, student loans, and lines of credit.
For each account, your report shows who it is with, your payment history, the initial amount borrowed (for loans) or credit limit (for revolving credit), the current amount owed, and when it was opened/taken out.
Your report also shows if you have experienced any credit-related legal actions, such as a judgment, foreclosure, bankruptcy, or repossession, and who has pulled your report (called an "inquiry").
There are three major credit bureaus that compile and maintain credit reports - Equifax, Experian, and TransUnion. Theoretically, all three of your reports should be the same, but it is not uncommon for creditors to report to only one or two of the bureaus.
The Fair and Accurate Credit Transactions Act of 2003 (FACT Act), an amendment to the Fair Credit Reporting Act (the law that regulates credit reporting agencies), provides consumers access to their credit reports. As part of this Act, you are allowed a free copy of your credit report once per year.
The three credit bureaus have established one central website, telephone number, and mailing address to use for ordering these reports, also known as the Annual Credit Report Request Service (Contact information below).
If you request your reports online, you will have access to them immediately. Requests via telephone or mail will take approximately two weeks for processing. Credit scores can be purchased for a fee from the credit bureaus. However, most will not provide you with a FICO score.
Annual Credit Report Request Service
P.O. Box 105281, Atlanta, GA 30348-5281
P.O. Box 2104, Allen, TX 75013-2104
P.O. Box 2000, Chester, PA 19022
P.O. Box 740241, Atlanta, GA 30374
If you see any errors on your report, you should dispute these immediately as it will take some time for the credit bureau(s) to investigate. Disputes can be done online, over the phone, or by mail. Deciding which one to choose will depend on the type of error that you find. The credit bureau(s) have 30-45 days to investigate your dispute. Any inaccurate or unverifiable information must be removed from your report.
Beware of the credit repair myth. It is not possible to permanently remove accurate items from your credit report through the dispute process or any other method.
The dispute process is for removing incorrect information only. Any company offering to remove negative accurate items from your report is engaging in deceitful – or possibly illegal – practices. Any fees paid to these companies can be extremely difficult to recover.