Know Your History
Order a free copy of your credit report--and then dig in
By Carolyn Bigda

(MONEY Magazine) – Why? Because as of Sept. 1, each bureau must send one free copy a year to everyone who requests it. (Go to or call 877-322-8228.) Because mistakes are common: A recent survey found that 79% of reports contain an error. Because if someone has stolen your identity, the first signs of fraud may show up here. And because even a clean history offers insights into how to improve your creditworthiness.

How to navigate the high points of your report:

• Key Data

WHERE TO LOOK Equifax and TransUnion: Personal Information Experian: Identifying Information

WHAT'S THERE Your name, Social Security number, date of birth, current and previous addresses, phone number and employers

WATCH FOR Errors. A misspelled name is a hassle. An address you don't recognize could mean that someone has opened an account in your name.

TIP Truncate your Social Security number Ask the credit bureau to x out your SSN when you request your free report. That will protect your identity if the document winds up in the wrong hands.

• Good Behavior

WHERE TO LOOK Equifax and Experian: Accounts in Good Standing TransUnion: Satisfactory Accounts

WHAT'S THERE You'll find all revolving and installment loans that are paid up.

WATCH FOR Account balances, especially on credit cards. The amount of credit you use, or your credit-utilization ratio, is one of the most important factors behind your credit score. If you carry a balance on your credit cards, Evan Hendricks, author of Credit Scores and Credit Reports, recommends keeping it to a third or less of each card's limit.

TIP Make sure all the numbers are there Your credit limit is the maximum you can borrow or the original loan amount. When it's missing on a revolving account like a credit card, your highest balance takes its place. That can damage your credit-utilization ratio. Say your high balance was $1,800 despite a $5,000 limit. If you regularly charge $1,800 a month, it looks like you max out your card.


Balance: $20 Date Verified: 04/1996 High Balance: $1,800 Credit Limit: $5,000

• Black Marks

WHERE TO LOOK Equifax: Accounts Currently Past Due, Negative Account History, Collections, Public Records Experian: Potentially Negative Items, Public Records TransUnion: Adverse Accounts, Public Records

WHAT'S THERE Your history of accounts past due, including how often you've been 30, 60 or 90 days late (as shown below). Plus, collections, bankruptcy, tax liens and other judgments.

WATCH FOR Your payment record affects 35% of your credit score, so dispute errors (see "Keeping Your Record Clean") and start improving your record by paying on time.

TIP Watch out for unfamiliar accounts Most negative information remains on your report for seven years (bankruptcy stays for up to 10). Scan this section for overdue accounts that aren't yours--more evidence of potential fraud.

Estimated date that this item will be removed: 01/2008

• New Credit

WHERE TO LOOK Experian: Requests for Your Credit History Equifax and TransUnion: Inquiries

WHAT'S THERE Shows how often you shop for a loan, which makes up 10% of your credit score. The more frequently you apply for credit, the more risky you appear to a creditor. (Rate shopping for a mortgage or car loan doesn't hurt.)

WATCH FOR Credit applications you don't recognize, which could be a first sign of identity theft. Check with the creditor to make sure no erroneous accounts have been opened.

• Keeping Your Record Clean

Repair mistakes: To dispute inaccuracies, contact the credit bureau. For errors such as a misspelled name, filing online or by phone is sufficient. For anything more serious, you'll want a paper trail, so write to the bureau by certified mail with a return receipt requested (the address is on the report). Also notify the creditor in writing that you've initiated a dispute. With a free report, the bureau must investigate your claim within 45 days of receiving it.

Have your say: When a dispute is not resolved or you'd like to explain, say, a bankruptcy, you can submit a 100-word statement to the bureau and have it attached to your report. That way a creditor will see your side of the story, not just the bureau's.

Protect yourself: You can place a 90-day fraud alert on your credit file if you're worried about ID theft. A call to one bureau triggers the alert at the other two, but check to make sure it's there.

WHERE TO LOOK Equifax: Alerts Experian: Important Messages TransUnion: Special Messages