Many people use the first of the year to set goals for the coming year. Just like the ritual of changing your smoke alarm batteries when we change the clocks twice a year, the beginning of a new year is a great time to review your credit reports (by the way, there is no penalty or negative effect on your credit for checking your own report).
Many people do not know that there is actually a federal law mandating that the credit bureaus provide a free copy of their credit file once per year. This does not involve a trial membership, and there is absolutely no cost if you go to the correct website. The official website set up to provide free annual credit reports to consumers is Annual Credit Report.com. Most people are able to verify their identity and actually gain immediate access to their credit report while online. For those that can not be verified through the online process, you will receive your credit reports by mail.
In addition to accessing your credit reports through the annual government mandate, there are two other sites I recommend using as supplements. These sites both legitimately offer free copies of your credit reports on an ongoing basis and a host of other tools (including access to your credit scores). These sites are not providing free credit reports by way of a government mandate, but have a 'for profit' business model. If you sign up to use either of these free sites, you will see offers for credit cards, mortgages, auto loans, and other financial services while you are on their website. It is through the revenue of the ads that are displayed that the service can be made available for free. For more information on these two free services, see my article - Free Tool Helps You To Raise Your Credit Score.
While some people might consider it redundant to access their credit reports through both the Annual Credit Report site and the other two sites I have listed, there is a good reason to do so. First, I have found that the credit reports are much more complete through the official Annual Report site. The other two 'for profit sites' provide credit reports that are a little more abbreviated without as much detail. It should also be noted that these sites also provide a host of other valuable free services, such as free notifications that alerts you when your credit report is accessed by a third party, credit scores, and tools to help you to raise your scores.
What To Look For In Your Credit Reports -
- Verify that your payment history is accurate. If there are errors you can dispute them at the credit bureau websites or send a letter.
- Check your balances. If your account balances are actually lower than what is being reported this is important to address, as your score will be negatively impacted as a result.
- Look for accounts that may not belong to you. This can be an innocent error (such as an account of a relative with a similar name) or it can be a warning sign of identity theft.
- Check your inquiries. This is a record of all of the third parties that have accessed your credit file. Again, this may be another chance to find out if someone is attempting to steal your identity.
Wishing you a happy new year, and helping you make the most of God’s money!