Credit Reports 101

Credit is a curious concept. If you don’t have any, you want some. When you do have it, you may not want so much! Credit reports describe your life in financial terms, but for many, the logic and nature of these reports aren’t easy to follow. Considering the importance personal credit reports have on many aspects of one’s life, few can afford to ignore how their credit reports stack up.

Three-for-One: The Major Credit Bureaus

For those new to the idea of credit scores, it’s often surprising that they don’t have just a single score. Everyone has three. Creditors — that is, institutions from which you borrow money or arrange credit — report your activity to credit bureaus, good, bad or average. However, there are three major credit bureaus, and most creditors don’t share information with all three.

These bureaus are Equifax, Experian and TransUnion. A credit card provider may report to two, for example, but not the third. However, a car loan company may report only to the third. Therefore, a complete picture of a person’s credit history requires looking at all three.

Check It Out: Keep On Top of Your Score

Everyone has the right to check — for free — their credit score with each bureau, once a year. The Fair Credit Reporting Act assures this right, as well as others, under law. The three bureaus sponsor the Annual Credit Report.com site to support this free annual look.

In this day and age, with data breaches, identity theft and credit card fraud, leaving credit to an annual checkup isn’t a very tight watch. Credit monitoring services such as Identity Guard, Privacy Guard and LifeLock keep watch over your scores year round, though of course, at a fee.

Protect Your Score: Disputing Activity

Mistakes happen. When something wrong occurs with your credit score, through one, two or all of the bureaus, you have the right to dispute the activity. The bureaus are then obligated to investigate and, if your dispute holds up, correct the information in your report. While credit repair services offer to do this for you, there’s little they can accomplish that you can’t do yourself. Unless you have a complex history full of errors, it’s probably most economical to look after your credit yourself.

About Paul Gaulkin

Paul Gaulkin is enrolled with the US Treasury to practice before the IRS. Mr. Gaulkin possesses technical knowledge in the process of securing relief for taxpayers in need of tax help. With an accounting degree from Florida International University, he is able to transform complex tax and accounting problems into easy to understand solutions.


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