Why You Should Review Your Credit Report Regularly

What Is a Credit Report and Why Is It Important?

A credit report is a document that details your history of managing and repaying debt. When you open a consumer credit account, the lender will typically report various information—balances, payment history, credit inquiries and more—to one or more of the three national credit bureaus, Experian, TransUnion and Equifax.

The credit bureaus include this data in your credit reports in a way that allows you and other organizations to get a full picture of your credit history.

When you apply for credit, lenders use your credit report, along with your credit score, to evaluate how likely you are to repay the debt on time. A borrower who has a well-established credit report with no negative marks will have an easier time getting approved with favorable terms than a borrower with a thin credit file or some negative history.

Other organizations and individuals that can review your credit reports include landlords, utility companies, leasing firms, insurance providers and employers.

Learn more >> What Is a Thin Credit File?

What Does Your Credit Report Include?

Your credit reports contain a variety of information about you and your dealings with creditors. As you review your reports, here's what you'll find.

Personal Information

Your personal information is based on what you've provided to lenders on credit applications, so there can be some variations. However, other organizations can use it to verify your identity. In particular, you'll see the following:

• Full name, including aliases, nicknames and previous surnames
• Social Security number, partially masked for your protection (though it will not appear at all on your Experian credit report), as well as variations on the number that may have been reported to the bureau
• Date of birth (the entire date or just the year)
• Current and previous addresses
• Phone numbers
• Employment history
• Joint applicants, if applicable
• Personal statements submitted by you

Accounts

Also called tradelines, your credit accounts will be grouped into different categories, including open revolving accounts, open installment accounts and closed accounts. The details displayed may vary depending on the type of account and the credit bureau.

On an Experian credit report, for instance, you'll find the following for each tradeline:

• Lender name
• Partial account number
• Account status
• Type of account
• Open date
• Closed date (if applicable)
• Current balance
• Original balance (installment loans only)
• Payment status and history
• Monthly payment amount
• Other loan terms and marks

Learn more >> Revolving vs. Installment Credit: What's the Difference?

Inquiries

When you apply for credit, lenders typically run a hard inquiry on one or more of your credit reports with your permission. These inquiries can negatively impact your credit, though the effect is minor and temporary.

Additionally, lenders and other organizations may check your credit reports for other reasons, such as when you request prequalification, apply for auto or homeowners insurance or open a utility account. This credit check is called a soft inquiry and doesn't impact your score, but it's still listed on your reports for your information.

Learn more >> How Many Hard Inquiries Is Too Many?

Collections

Collection accounts are created when a lender sells a past-due debt to a collection agency, resulting in a separate tradeline being added to your credit reports.

For each collection account, you'll typically find the following:

• Original creditor's name and contact information
• Collection agency name
• Original amount due
• Current balance
• Date the collection account was opened

Learn more >> What Types of Debt Can Go to Collections?

Public Records

Currently, the only public record that shows up on your credit reports is a bankruptcy filing. If you've filed bankruptcy in recent years, you may see a handful of details about it, including:

• Type of bankruptcy
• Court name
• Filing date
• Discharge date (if applicable)

Also note that when you include a debt in a bankruptcy petition, the creditor will update your tradeline to reflect that.

Why Is It Important to Check Your Credit Report?

Checking your credit report regularly is crucial for building and maintaining a solid credit history. Here are some of the reasons why.

1. Stay Proactive Against Fraud

Checking your credit file can help you spot potential identity theft or fraud early. If you see an address that's unfamiliar, credit accounts you didn't apply for or activity on credit cards you have not used recently, a credit report can give you a heads-up. Much like a medical checkup, finding a problem early can keep it from growing worse.

2. Spot and Dispute Errors

Credit reporting is a complex process, and not all errors suggest fraud. A payment that was mistakenly reported late by a lender, for instance, can badly damage your credit. If you find inaccurate information on your credit reports, you have the right to file a dispute with the lender or the credit bureau on whose report the late payment appears.

You might also notice information that suggests a typographical error, such as when a lender reports an incorrect Social Security number (SSN) or an address with transposed numbers. You have the right to dispute an incorrect SSN or other personal information and request to have it removed. To protect you from identity theft, your real SSN will never appear on your Experian credit report.

3. Make Sure Payments Are Being Reported as Agreed

Especially when you are building credit, it's important to make sure your on-time payments are being reported. If you get a credit-builder loan, for example, you'll want one that reports to all three major credit bureaus. Check your credit report to be sure that's happening.

4. Take Action to Improve Your Credit

Your credit score is based entirely on the information in your credit report, so reviewing your report to see where you may be able to reduce debt and ensure information is current and correct can go a long way toward helping you build and maintain a pristine credit profile.

Improving your credit is particularly important if you plan to take out a loan, get a new credit card, rent an apartment or sign up for a new utility account. A good credit score can help you get a lower interest rate on a loan or credit card and potentially reduce or eliminate a utility or rent deposit.

How Often Should You Check Your Credit Report?

At a minimum, check your credit report once a year, though it can make sense to do it more often if you experience any of the following situations:

• You're planning to apply for credit to fund a big purchase, such as a house, car or boat, in the next three to six months.
• You've received a notice about a data breach that has compromised your personal information.
• Your wallet, credit card or personal information (like your SSN) has been stolen.
• You've accomplished a major credit milestone, such as opening a mortgage loan or paying off student debt.
• You've noticed a dramatic swing in your credit score and don't understand why it happened.

Remember that it's a good idea to check your credit report from each of the three major credit bureaus. And anytime there is an unexpected change on one credit report, you should check the other two.

How Often Can You Check Your Credit Score?

You can get free access to your FICO^® Score^☉ and credit report with Experian anytime, as well as free weekly reports from all three credit bureaus through AnnualCreditReport.com.

So, while you don't necessarily need to review your reports more than once a year if things are stable, you can monitor your credit as often as you'd like.

How to Check Your Credit Report

You can easily check your Experian credit report for free anytime. Credit reports are easy to read―no complicated codes or jargon—and it shouldn't take more than a few minutes to read yours.

To see your Experian credit report, you'll need to register for an account and share some personal, identifying data, but the process is secure. Once you've completed the process, you'll get free credit monitoring from Experian, which means you will be notified of changes in your credit report, such as when someone applies for credit in your name or an account is closed or paid off.

Alternatively, you can check credit reports from each of the three major credit bureaus for free at AnnualCreditReport.com. Again, you'll need to answer some basic questions to verify your identity, after which you can review your reports instantly or save or print them out to read later.

The Bottom Line

Checking your credit report at least once a year is good credit hygiene. It can help assure you that your credit is healthy and your information accurate. Checking more often is wise if you plan to use your credit to make a big purchase or if you have been a victim of identity theft or believe you are at risk for it.

If you find that your credit score isn't where you'd like it to be, you can begin taking steps to improve it, including signing up for Experian Boost^®ø to make on-time rent, utility, cellphone, insurance and streaming subscription payments work for you.