Free Credit Reports

Congress has authorized free credit reports once a year under the Fair and Accurate Credit Transactions Act.

Credit History

One of the most important pieces of information you can have is your current credit report. A good and accurate credit report is an essential financial asset. In addition, a credit report can reveal discrepancies or inaccuracies that could impair your request for additional credit. It is always better to correct a problem in the credit report before applying for a mortgage loan than it is to try to correct it after applying.

The U.S. Congress has authorized free credit reports once a year. Under the Fair and Accurate Credit Transactions Act (FACT Act), consumers can request and obtain a free credit report once every 12 months

from each of the three nationwide consumer credit reporting companies: Equifax, Experian and TransUnion. Under the law, you can monitor your credit reports for free by ordering a report from one bureau, waiting 4 months before ordering another report from another bureau and then waiting 4 more months before ordering from the third bureau.That way you can monitor your credit every 4 months while taking advantage of the yearly free report mandated by the law.

It is entirely your choice whether you order all three at the same time or order one now and others later. The advantage of ordering all three at the same time is that you can compare them. However, you will not be eligible for another free credit file disclosure for 12 months. The advantage of ordering one now and others later is that you can keep track of any changes or new information that may appear.

If you do find legitimate mistakes in your credit reports, correct them as quickly as possible. The credit reporting companies post their dispute procedures online, and it costs nothing. Each agency will suspend the negative or incorrect report while it investigates your request. You will need to provide proof to correct mistakes and explanations to resolve any problems. Be sure that all three credit reporting companies correct any errors and that mortgage lenders who have earlier reports receive the corrected update.

Tip

The Fair Credit Reporting Act (FCRA), under the auspices of the Federal Trade Commission (FTC), gives you the right to correct an error in your credit report. Visit www.ftc.gov or call 877.382.4357 for information on how to correct errors. To obtain your credit report, you can click on www.annualcreditreport.com, a centralized service for consumers to request annual credit reports. It was created by the three nationwide consumer credit reporting companies and is the only service authorized by all three for this purpose. The service also provides options to
request reports by telephone and by mail.

You also can request a free annual credit report by phone or mail through the Annual Credit Report Request Service in your state; the report will be mailed within 15 days. As a security precaution, you should never provide your personal information to any other company or person in connection with requesting free annual credit reports under the FACT Act.