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Credit Scores and Credit Reports

Your credit score and credit report affect whether you can get a loan, credit card, and other credit, as well as what interest rate and other terms you’ll get. They can also affect your ability to rent a home, get a job, or get insurance. Your credit score is a number that is calculated based on credit report information, which is a record of how timely you are in paying your bills, what type and amount of debt you have, where you’ve lived, whether you’ve been sued or arrested, and other information. Creditors report your payment and debt information to credit reporting companies, which then put together credit reports that other creditors can access when deciding whether to give you credit. There are three major credit reporting companies in the United States: Equifax, Experian, and TransUnion.

Because your credit score is based on your credit report, it is important to check your credit report regularly to make sure that it is correct, tell the credit reporting companies if there are any errors, and repair your credit if necessary. Read on to find out how to:


Check Your Credit Report

Because your credit report is so important in determining your ability to get loans, credit, and housing, it’s important to check your credit report regularly to make sure it is correct, complete, and up to date. Checking your credit report will also alert you to identity fraud, because you’ll be able to spot if someone has opened unauthorized accounts in your name or if there have been late payments reported for purchases you didn’t authorize or know about.

You can get one free copy of your credit report every 12 months from each of the three major credit reporting companies (Equifax, Experian, and TransUnion). All three credit reporting companies collect credit information, but different things may show up on the different credit reports. So, one option is to get all three credit reports from the three companies at the same time, once a year, and check the reports against each other to make sure everything is correct. Another option is to get one credit report from one company, wait for four months before getting a report from another company, wait four months before getting a report from the third company, and then start the process all over four months later. That way, you can monitor your credit regularly for free.

In addition, you can get a free copy of your credit report:

  • If a company denies your application for credit, insurance, or employment and you request the report within 60 days of the denial;
  • Once a year, if you are unemployed and plan to look for a job within 60 days;
  • Once a year, if you are on public assistance; or
  • Once a year, if your credit report is inaccurate because you’ve been a victim of identity theft or other fraud.

To order a free credit report, go to Annual Credit Report or call 1-877-322-8228. You can also fill out the Annual Credit Report Request Form and mail it to:

Annual Credit Report Request Service
P.O. Box 105281
Atlanta, GA 30348-5281

Annual Credit Report is the only authorized source for the free credit reports you are entitled to. Other companies and websites may offer supposedly “free” credit reports or credit scores, but often they charge hidden fees, try to sell you something, or collect your personal information to sell to other companies. While Annual Credit Report requires you to submit certain personal information when you fill out the form to request your free credit report, it will not call or email you to ask for personal information. If you get such a call or email, it is probably a scam.

For more information on checking your credit report, visit the Federal Trade Commission’s Free Credit Reports and the Consumer Financial Protection Bureau’s Getting A Credit Report.


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Dispute Errors on Your Credit Report

If information in your credit report is incorrect, you have the right to dispute the error so that it is corrected. Here is how to dispute an error:

First, write a letter to whichever credit reporting companies (Equifax, Experian, and TransUnion) have the incorrect information to notify them of error and to request a correction. Include the following information:

  • Your name and address;
  • The specific information in your credit report that is incorrect;
  • An explanation of why that information is incorrect;
  • Copies (not originals) of any receipts, emails, or other documents to support your explanation; and
  • Your request that the information be deleted or corrected.

You may use the Federal Trade Commission’s sample dispute letter to credit reporting companies and attach a copy of your credit report with the incorrect items circled. Send the letter by certified mail or priority with tracking, and keep copies for yourself.

Second, write a letter to the information provider that provided the incorrect information to the credit reporting companies. This might be a store that incorrectly billed you for a purchase, a landlord that incorrectly said you were late on your rent, or some other person, company, or organization. If the information provider’s address is not listed on your credit report, contact the information provider for the address for submitting disputes or notices of error. Include the same information as in your letter to the credit reporting agencies. You may use the Federal Trade Commission’s sample dispute letter to information providers and attach a copy of your credit report with the incorrect items circled. Send the letter by certified mail or priority with tracking, and keep copies for yourself.

Credit reporting companies must investigate all disputes, usually within 30 days, unless they consider your dispute frivolous. They will forward your dispute to the entity that provided the disputed information, who will then investigate your dispute and report back to the credit reporting company. If the information provider determines that its information was incorrect, it must correct that information with all three of the major credit reporting companies.

Credit reporting companies must investigate all disputes, usually within 30 days, unless they consider your dispute frivolous. They will forward your dispute to the entity that provided the disputed information, who will then investigate your dispute and report back to the credit reporting company. If the information provider determines that its information was incorrect, it must correct that information with all three of the major credit reporting companies.

Credit reporting companies must send you a written notice of their investigation results and, if they delete or correct any information on your credit report, a free copy of your updated credit report. You may ask the credit reporting company to send a notice of the correction to anyone who received your credit report in the last six months.

If you are unable to get the disputed information corrected or deleted, you may ask the credit reporting companies to add a statement noting your dispute in your file and future credit reports.

For more information on disputing errors in your credit report, visit the Federal Trade Commission’s Disputing Errors on Credit Reports and the Consumer Financial Protection Bureau’s Disputing Errors On A Credit Report.


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Repair Your Credit and Improve Your Credit Score

Here are some tips on how to repair your credit and improve your credit score:

    Pay your bills on time. Paying off your credit card balance and paying your other bills on time will go a long way toward improving your credit score.

    Have some—but not too many—credit accounts. Creditors want to know your track record of paying off bills and debts, so to show a good track record, establish some credit accounts, make your payments on time, and try not to have a lot of debt. On the other hand, having too much credit—for example, having many credit cards—may damage your credit score, because creditors may look at your total debt potential.

    Avoid applying for too much new credit in a short period of time. Applying for many new credit cards or other credit accounts in a short period of time counts as several “inquiries” on your credit report and can negatively impact your credit score, so be thoughtful about what credit cards or financing to apply for. Note, though, if you have several inquiries for a mortgage or vehicle loan in a short period of time, many creditors will consider them as a single inquiry.

    Don’t max out your credit limits. Creditors compare your debt to your credit limit, and your credit score will likely be hurt if the amount of debt you owe is close to your credit limit. According to one rule of thumb, creditors may be hesitant to lend you money if your debts are more than 75% of your credit limit. So, make sure you know how much you owe on your credit cards and other debt. If you can, pay off your full credit card balance every month. If you can’t, try to keep a low balance and pay down as much as you can.

    Work out repayment plans. If you are having trouble paying your bills or repaying your loans, contact your creditors to discuss repayment options. If you arrange a repayment schedule with a creditor, make sure—before you make any payments—that you have a written agreement from the creditor that as long as you keep up your end of the plan, the creditor will report your account as current, paid off, and not late. It is better to work out a repayment plan sooner rather than later because creditors generally won’t work with you after they send your account to a debt collection service, and that will likely cause more damage to your credit score.

If you need help repairing your credit, contact a non-profit credit counseling service that can help you for little or no cost. You can also check with your employer, credit union, or housing authority to see what no-cost credit counseling programs may be available.

It takes time to build up or repair your credit. Unfortunately, there are a lot of fraudsters trying to prey on consumers who want to fix their credit. Steer clear of any credit counselor or company that promises quick-fix credit repairs, promises to hide your bad credit history, requires upfront payment, or tells you to dispute accurate credit report information or to give false information to creditors.

Here are some resources to help you find a reputable credit counselor:


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If you believe a consumer reporting company, creditor, or credit counselor has violated the law, you may file a complaint with the Attorney General’s Office. The Office uses complaints to learn about misconduct. However, we cannot give legal advice or provide legal assistance to individuals.

You may also file a complaint with the Federal Trade Commission online or by calling 1-877-FTC-HELP.

For more information about credit scores and credit reports, visit the Federal Trade Commission’s Credit Scores and the Consumer Financial Protection Bureau’s Credit Reports And Scores.

State & Federal Laws

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California Law

View a checklist of significant California consumer laws

CA Dept of Consumer Affairs

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