Credit Report & Score Check

Why Check Your Credit at Year-End?

Your credit report and score impact nearly every major financial decision: mortgage rates, car loans, credit card approvals, apartment rentals, insurance premiums, and even job opportunities. Year-end is the perfect time to review your credit health, dispute errors, and create an improvement plan for the upcoming year.

Understanding the Credit Score System

FICO Score vs VantageScore

Two main credit scoring models exist, though FICO is used by 90% of lenders:

Credit Score Ranges

Credit Score Factors

Getting Your Credit Reports

Free Annual Credit Reports

Federal law entitles you to one free credit report from each bureau every 12 months:

The Three Credit Bureaus

• Equifax: One of the big three, 800 million consumers worldwide
• Experian: Largest credit bureau, offers free FICO score with account
• TransUnion: Third major bureau, commonly used by lenders

Why three? They operate independently and may have different information. Lenders report to one, two, or all three, creating potential discrepancies.

Accessing Your Credit Score

Unlike reports, scores are not free through AnnualCreditReport.com. Options include:

Free Score Options

• Credit Card Issuers: Many provide free FICO scores monthly (Chase, Discover, Citi)
• Credit Karma: Free VantageScore 3.0 from TransUnion and Equifax
• Experian: Free FICO 8 score with free account
• Bank Apps: Some banks include scores in mobile apps
• NerdWallet, WalletHub: Free VantageScores

Paid Score Options

• myFICO.com: $19.95-$39.95/month for all three FICO scores and reports
• Credit Monitoring Services: $10-$30/month with additional features
• One-Time Purchase: $15-$40 per score from bureaus directly

Reviewing Your Credit Report

What's on Your Credit Report

Personal Information

• Full name and any name variations
• Current and previous addresses
• Date of birth
• Social Security number (partial)
• Employment history

Account Information

• Creditor name and account number
• Account type (credit card, mortgage, auto)
• Date opened and credit limit/loan amount
• Current balance and payment status
• Payment history (24-84 months typically)
• Account status (open, closed, paid)

Negative Items

• Late payments (30, 60, 90, 120+ days)
• Collections accounts
• Charge-offs
• Bankruptcies
• Foreclosures and repossessions
• Tax liens and civil judgments (if recent)

Inquiries

• Hard Inquiries: When you apply for credit (visible to lenders)
• Soft Inquiries: Pre-approvals, your own checks (not visible to lenders)

Line-by-Line Review Checklist

Common Credit Report Errors

Disputing Credit Report Errors

How to File a Dispute

1. Document the Error: Gather proof (payment receipts, statements, correspondence)
2. Contact the Bureau: File dispute online, by mail, or by phone
3. Contact the Creditor: Also dispute directly with the company that reported it
4. Wait for Investigation: Bureau has 30 days to investigate and respond
5. Review Results: Error must be corrected, verified as accurate, or removed
6. Follow Up: Check that correction appears on all three bureau reports

Dispute Methods

Online (Fastest)

• Equifax: equifax.com/personal/credit-report-services/credit-dispute
• Experian: experian.com/disputes
• TransUnion: transunion.com/credit-disputes
• Can upload supporting documents
• Track dispute status online

By Mail (Creates Paper Trail)

Send certified mail with return receipt to create legal record:

• Include copy of report with items circled
• Attach supporting documentation
• Write clear explanation of error
• Keep copies of everything sent

What to Include in Dispute Letter

After Filing a Dispute

• Investigation Period: 30 days (45 days if you provide additional info during investigation)
• Bureau Actions: Contacts creditor, requests verification, reviews evidence
• Possible Outcomes:
  • Error corrected or removed
  • Information verified as accurate (remains on report)
  • Account updated with corrected information
• If Unresolved: You can add 100-word statement to your report explaining your side

Improving Your Credit Score

Quick Wins (30-90 Days)

1. Pay Down Credit Card Balances

Impact: High - Reduces utilization immediately

• Pay before statement closing date for fastest impact
• Target under 10% utilization on each card
• Focus on cards closest to their limits
• Consider making multiple payments per month

2. Request Credit Limit Increases

Impact: Medium - Lowers utilization without paying down debt

• Call issuers and request increase (may be automatic)
• Don't spend the additional credit
• Works best if you've had card 6+ months with good payment history
• Some issuers do soft pull, some do hard pull (ask first)

3. Become an Authorized User

Impact: Medium - Adds positive history to your report

• Ask family member with excellent credit and low utilization
• You don't need actual card to benefit
• Their payment history becomes yours
• Watch out: their bad behavior will hurt you too

4. Dispute Errors

Impact: Varies - Can have dramatic effect if errors are significant

• Incorrectly reported late payments
• Wrong credit limits lowering utilization ratios
• Duplicate accounts
• Accounts not belonging to you

Medium-Term Strategies (3-12 Months)

5. Pay All Bills On Time

Impact: Critical - Most important factor

• Set up automatic payments for minimums
• Use calendar alerts 3 days before due dates
• Even one 30-day late payment can drop score 100 points
• Older late payments hurt less over time

6. Pay Off Collection Accounts

Impact: Medium - Shows responsibility, may improve score

• Negotiate "pay for delete" if possible
• Get agreement in writing before paying
• Paid collections hurt less than unpaid
• Newer scoring models ignore paid collections

7. Use Credit-Builder Loan

Impact: Medium - Builds payment history

• Bank holds loan amount while you make payments
• Get money back after final payment
• Typically $300-$1,000 over 6-24 months
• All on-time payments reported to bureaus

8. Get a Secured Credit Card

Impact: Medium - Rebuilds credit if you have poor score

• Deposit ($200-$500) becomes your credit limit
• Use and pay off monthly like regular card
• After 6-12 months, may convert to unsecured
• Get deposit back when closing or converting

Long-Term Strategies (1-7 Years)

9. Keep Old Accounts Open

Impact: Medium - Lengthens credit history

• Don't close oldest credit card
• Use occasionally to keep active
• Even if there's an annual fee, may be worth keeping
• Closing account reduces available credit

10. Time Will Heal

Impact: Guaranteed - Negative items age off

• Late payments: 7 years from date of delinquency
• Collections: 7 years from original delinquency date
• Chapter 7 bankruptcy: 10 years
• Chapter 13 bankruptcy: 7 years
• Hard inquiries: 2 years (impact fades after 12 months)

What NOT to Do

• Don't pay for credit repair services: You can do everything they do for free
• Don't close accounts in good standing: Hurts utilization and history length
• Don't apply for multiple credit cards quickly: Hard inquiries add up
• Don't max out credit cards: Even if you pay them off monthly
• Don't ignore collections: They won't go away and will hurt you
• Don't co-sign loans: You're equally responsible if they don't pay

Credit Monitoring

Why Monitor Your Credit?

• Early detection of identity theft
• Catch and fix errors quickly
• Track improvement efforts
• Get alerts for significant changes
• Stay informed before major purchases

Free Monitoring Options

• Credit Karma: TransUnion and Equifax scores, weekly updates
• Credit Sesame: TransUnion score, monthly updates
• Experian Free Account: Experian report and FICO score
• Credit Card Issuers: Many offer free monitoring to cardholders
• Bank Apps: Some include credit monitoring features

Paid Monitoring Services

• myFICO Premier: $39.95/month, all three FICO scores, monitoring
• Identity Guard: $8.99-$24.99/month, credit monitoring plus ID theft protection
• LifeLock: $9.99-$29.99/month, Norton security plus credit monitoring
• Privacy Guard: $24.99/month, three-bureau monitoring