Wednesday, March 07, 2012

Credit Card Reporting

I have heard this story a few times. A married person brings their child for a car, goes to take out a car loan, and finds their credit is ruined. The reasons can be anything from identity theft to marriage problems. Either way, however, it is a bad situation to be in.

Maybe you have heard the "free credit report" Web sites advertising. The main one of these,, is free but requires users to sign up for services in order to get their "free" report. However, why do that when the companies that keep track of your history are legally required to provide you this information for free once a year?

In 2001, I graduated from college, and a friend mentioned that New Jersey residents could get copies of their credit reports by sending a letter to each agency. When I got the report, I was surprised to find I had a few active credit card accounts. They were open because I applied. Since I wasn't living at home, I didn't get my mail often, so I had accounts open. I recall applying for one in college in exchange for a t-shirt, and I filled one out at a Devils game for a hat. I spent a while calling credit card companies and closing accounts I did not use.

At that point in time, each state had different laws regarding this, but today, residents of the United States have the right to view this information online once a year for free from each of the three credit reporting bureaus. In order to get a copy of your report, you can log on to the Web site the three agencies have set up:

They may offer to sell you extra services, but if you decline, you will not be charged anything. The general rule of thumb is if they offer premium services, you don't want those.

In my experience, it was good to do a credit report for the first time to see what information they had there. Today, I check it for identity theft or fraud, and fix any errors they might have on there (they may have mistakes, and if it costs you a loan, that is bad).

For most users, an annual credit report for free is enough, but there are services for people who want something more (like real-time monitoring, or access to your credit score). For most users, I think spending an hour a year on this is a great idea. I put it on my calendar to do each year, so if something does happen, I should become aware of it.