You should check your credit history every year or two to ensure the information is correct. You may be surprised to find outstanding balances, credit cards, and claims you were not aware existed. Your credit report should especially be checked and corrected a few months before applying for a mortgage, car or any other large purchase loan. Even if you can fix or explain the problem easily during the application process, you will still go through a lot of hassle trying to clear up a bad credit rating making future loans difficult to obtain if you don't correct the problem before you apply for a loan.

     Check your credit history by contacting each of the following credit agencies for a copy of your credit report. Beginning Dec. 1, 2004, the Federal Trade Commission mandated via a federal law requiring the three credit agencies provide a free credit report every year. Therefore, there is no reason to not check your credit history on an annual basis. Simply visit the web site http://www.annualcreditreport.com or call 877-322-8228 to receive your free report. If you contact the credit agencies directly, then you will have to pay a fee.

     Evaluate the information in the report and then report any errors to the credit agency. Be sure to cross-reference all three reports ensuring the same information is accurately reported. You may be surprised with the information found in the report. Errors do occur! There may be information that has nothing to do with you, but was erroneously included on your credit history. Also, information may be reported incorrectly by one credit agency, but reported correctly on the other two or all three may report incorrect information. After the problem is corrected, the credit agency will typically provide you an updated report showing the correction.

     Ensure all unnecessary credit cards are closed because you may be flagged as a credit risk if you have too much credit. Simply write a letter to the credit agency indicating you wish your account to be closed. After your request has been completed, you will receive a letter in the mail confirming the account has been closed. Keep the letter for your records so you have proof the credit card was closed in case issues arise in the future. Be sure to also pay attention to the comments for each of the credit references in your credit history. A misleading or incorrect comment can result in problems you were not aware existed.

     Keep in mind; if you are ever denied for anything due to a credit problem, the Fair Credit Reporting Act (FCRA) requires the company performing the credit check to furnish you the name of the credit reporting agency that conducted the investigation. You can then contact that credit agency to receive a free copy of your credit report to help determine exactly why you were denied. You have the right to know what is in your credit files and you have the right to demand corrections.

     Monitor the inquiries to your credit report. You have the right to inquire the nature of that inquiry. Use the following letter to contact the company making the inquiry:

Dear Creditor:
In a recent review of my credit reports I discovered an inquiry from your company. I do not recall authorizing you to review my credit. Accordingly, I would like to be sent proof that I initiated or requested for you to review my credit. Based on the FCRA, I must have authorized you to review my credit. Please forward a copy of that authorization. If you are unable to provide me with proof or you do not retain records of such authorization, please promptly remove the inquiry from my credit report reported by (name which credit bureau) and send me written confirmation of the removal.
Please respond at your earliest convenience.
Sincerely,
Joe Consumer

     NOTE: The three credit agencies may not reflect the same information; therefore contact each to correct any errors.


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