By Eric on September 29, 2011 7

When, How and Why to Check Your Credit Report

Have you ever checked your credit report? To be completely honest, we checked ours when we were going through Financial Peace University but have not checked it since. Your credit score is based on how much money you borrow against your lines of credit and then how you manage paying back those debts. Except for borrowing money from family to buy a Jeep, we haven’t taken out a loan in more than four years (our mortgage), and we no longer are paying on any loans except that mortgage.

If you step back and think about the credit score, it’s only needed if you are going to be taking out a loan. Since we have taken FPU, we have no interest in taking out a loan — besides a mortgage — ever again, and because we haven’t been paying on any debts for almost a year now (because we don’t have any), we know that our credit score will not look good.

>> Have no fear, there is this thing called manual underwriting where they actually look at your entire financial situation versus just pulling your credit debt score. When that time comes and you are worried about the bank taking care of you, try Churchill Mortgage, uncle Dave recommends them.

So, as I said, pulling our credit report is something that we have neglected to do over recent years, but I got this email from mint.com a few weeks ago that nudged me into doing this again.

But, before you just get your credit report from any website (even if they have really clever commercials) that will then send you junk mail and make you enroll in some program, let’s dive a little deeper into the when, how and why you should check your credit report.

  • When: You can (free of charge) and should check your credit report once a year.
  • How: Go to Annual Credit Report to get a copy of your credit report from all three of the agencies: Equifax, Experian and TransUnion.
  • Why: The reason to check your report every year shouldn’t be as a measure of how your debt score is moving, but rather it should be to ensure that it is accurate. Dave states that 79 percent of all credit reports contain some kind of error. There may be accounts on there you never opened or don’t know about, or it may remind you to cancel a store credit account that you don’t need or want. He also has some great information on how to read your credit report once you get it.

I just requested and reviewed my credit report in under 10 minutes. Give it a try!

We are definitely not experts on this subject and haven’t come across any road blocks by not having credit cards or small loans. What are your thoughts on the credit score system?

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Eric

Husband to Kelsey. Father to Rooney. Follower of Jesus. Born and raised in Iowa. I like blogging. Bulleted lists excite me. Thanks for stopping by.

  1. Cool topic! I went through and did it but was unable to get my credit score from anyone of them without paying for it (forget that), just the actual credit report, which doesn’t have the score on it. Maybe I did something wrong?

    • Sorry about that Sarah. That was terribly mis-leading of me. We origionally were going talk about credit scores, but didn’t want to pay for that either, so we talked more about the credit report. I’ve now changed the title of the post to be more accurate. The important thing is to make sure there are no errors on your report!!

    • Sarah, if you want to know your credit score, Norah’s comment below says she recommends creditkarma.com to get your score for free. You might look into that! I haven’t used it so I don’t know for sure how it works.

      • Thanks guys! :) I did download pdfs from all three agencies and it was a good reminder to check, I hadn’t done so in a while!

  2. What a coincidence – I actually just checked my credit score yesterday after reading a column in Juice magazine (http://dmjuice.desmoinesregister.com/article/20110927/JUICE/309280013) about how to check it for free. They recommended a site called CreditKarma (creditkarma.com) that allows you to see your credit score from TransUnion for free (and also grades the elements that make up your credit score on an A, B, C, D, F scale).

    Unlike most of the sites I’ve used for credit scores and credit reports, the site asked for no payment information; I believe they make their income like Mint.com does, with sponsored credit card, loan and insurance offers from third-party companies. I’d recommend CreditKarma to anyone interested in finding out their credit score and seeing the specific financial behaviors that influenced it, but remember that a credit score can change overnight, so don’t forget to check your credit REPORT as well.

  3. I don’t know how it all works, but i do know that it can sometimes hurt your score to have it checked. I don’t think it affects your REPORT at all, but if you want to know your SCORE, wait until you are requesting a loan, like a mortgage. then, you have a small window of time where you can request to see your score for free, without it hurting the score. hopefully that makes sense…. ;)

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