Credit reports

Last night I did actually manage to get online and get a copy of my (and Justin’s) credit reports.  And I know it’s completely boring, but I think it’s important to do that at least every couple years, so let me tell you a little bit about how it works and why it’s important.

DISCLAIMER: I’m not a financial expert or anything.  The information I’m giving here is just from my personal experience and things I’ve read.  If you’re looking for actually better informed research on credit reports and credit scores, I recommend going somewhere else.  Like here or here.

I got to AnnualCreditReport.com.  And I can’t remember why that’s the one I go to, if that’s the only free site or what, but there it is.  It’ll ask you what state you live in, ask you to fill in your name, social security number, birthday, address(s), and fill in a word captcha-type thing and then ask you which report you’d like to see.  There are three:  Experian, Equifax, and TransUnion.  I get all three because sometimes things are written on one that aren’t listed on another and I want to get as full a picture as I possibly can.  The annoying bit is that you can only get one at a time and then it’ll boot you back to the very beginning and you have to put in all that information all over again.  So you end up typing it in again and again.

Anyway, you type in all your information, choose the report you want to see, and it might ask you a couple more questions, like “are you familiar with any of these phone numbers” and “which of these businesses was your employer” and stuff like that.  And then it’ll show your report.

And then I print it or save it to .pdf so I can have it as a reference.  You can only access it once a year for free, so if you’re going to be interested in seeing it again that year, save a copy.  And I had trouble saving it, so make sure you check it before you leave the site.  For some reason, I kept only getting the first couple pages.

I printed off all three of my reports and all three of Justin’s reports.  Joint accounts show up on both, but accounts that are only one or the other, like school loans, only show up on the report of the person who took out the loan, obviously.

Okay, on to what’s listed on the reports.  The reports are all formatted differently and might show information differently, but what you’re really looking to see is what accounts are showing up and the standing of those accounts.  So, I have several credit cards, an auto loan, and a handful of school loans.  I check to see that the accounts that I expect to be closed are closed with a $0 balance, I check that the accounts I expect to be open are correct and there isn’t anything showing that I don’t expect, and that the balance on those accounts is what I expect.  And then I check the status of the open accounts to see if there are any late payments showing up.  The report holds information for 7 years, I think it is, so any problems that happened with repayment will stick around for several years, and that’s the type of information that lenders are interested in seeing.  So, for example, problems that Justin had with getting payments in on time back in 2007 are still showing up on the accounts.  But they’ll fall off in a couple years and then his credit score will go up.

I’m not going to get into the ins and outs of the credit score because there are whole books about that and it’s more complicated than I care to discuss.  Go to the experts for that.

I tend to think it’s a little interesting to see all this information — I can see how many of my loans are paid off, see how far back my credit history goes (1995, interestingly enough, because Dad added me to a credit card when I went to college and apparently that’s the date when he opened that credit line), and who all has been asking to see my credit report since that information is also listed on the report.  I like to know that my repayment history is looking clean.  And I discovered that my bank extended my line of credit last month by $500.  I didn’t know that!

If you’ve been a victim of identity theft, this would show you that, too, since you’d see accounts that you didn’t open.

All in all, I think of it like an annual check-up on my finances just like I go in for an annual check-up with my doctor.  Go over everything carefully and make sure it’s all healthy.  Nobody really enjoys all the things that go into an annual physical exam, and the same goes for reviewing financial accounts so carefully, but it’s better to catch problems as early on as possible.  And that’s why I think this is so important, even though it’s dull.