A credit report is a collection of information about where you live, how you pay your bills,
and whether or not you have been sued or filed for bankruptcy. Consumer reporting companies sell the information in your report to lenders, insurers, employers, and other businesses with a legitimate need for it. They use the information to evaluate your applications for credit, insurance, employment, or a lease.
How to Keep Your Credit Report Healthy
Credit scores are based on the information in your credit reports. You will have a unique score for each report based on its contents. Creditors and lenders use your credit score to determine whether or not they will issue you credit. Essentially, the higher the credit score, the more likely creditors will offer you a loan and at a lower interest rate. Lower interest rates usually translate into smaller monthly payments. The lower the credit score, the less likely you are to get a loan or a low interest rate. To find out what your ideal credit score would be, contact a potential lending institution and ask them which score would get you the most favorable rate.
The factors that typically determine your credit score are:
Payment History:
Whether or not you pay your bills on time
35 % of score
Amount Owed: The total amount you have in debt.and the proportion of balance to credit limit on certain accounts.
30 % of score
Length of Credit History: Length of time that you have had your longest standing account open.
More time is better. It's better for your credit score to keep your longest used credit card instead of closing it.
15% of score
New Credit: Number of recently opened accounts and recent inquiries
Less accounts and inquiries is better.
10% of score
Types of Credit Used: Number of different types of accounts
A good mix of accounts is better. 10% of score
The exact formula for calculating credit scores is not available to the public. Although you can pay for a copy of your credit score, we suggest requesting a free copy of your credit report since your score is based on the report.
Annual Free Credit Report
Free File Disclosure Rule (FACT)
Under the Free File Disclosure Rule of the Fair and Accurate Credit Transactions Act (FACT Act), each of the nationwide consumer reporting companies is required to provide you with a free copy of your credit report once every 12 months, but you have to request it - it is not sent to you automatically.
NOTE: Your credit history report is available free of charge, however, the credit bureaus will have other "products", such as credit scores and credit monitoring services for an additional fee. These products are optional and are not required to obtain your credit history report.
The three main consumer reporting companies generating credit reports are:
Equifax 800-685-1111
TransUnion 800-888-4213
Experian 888-397-3742
The consumer reporting company must tell you everything in your report, and give you a list of everyone who has requested your report within the past year - or the past two years if the requests were related to employment.
Consumer reporting companies collect and sell four basic types of information:
Identification and employment information. This includes your name, birth date, Social Security Number, employer, and spouse's name. The consumer reporting agency may also provide information about your employment history, home ownership, income, and previous address, if a creditor asks.
Payment history. This list your accounts with different creditors, showing how much credit was extended and whether you've paid on time. Related events, such as the referral of an overdue account to a collection agency, may also be noted.
Inquiries. Consumer reporting companies must maintain a record of all creditors who have asked for your credit history within the past year, and a record of individuals or businesses that have asked for your credit history for employment purposes for the past two years.
Soft Inquiries - When a company/business accesses your credit score for the purpose of offering you pre-qualified credit. Another type of soft inquiry is when you personally go to www.annualcreditreport.com to obtain your credit history/score. Soft inquiries do not affect your credit score.
Hard Inquiries - When you personally have authorized someone to pull your credit history/score for the purpose of obtaining a credit product or service. Multiple hard inquiries can negatively affect you credit score.
Public record information. Events that are a matter of public record, such as bankruptcies, foreclosures, or tax liens, may appear on your report.
Accessing Your Credit Report
To access your report, you will need to collect a variety of personal and account information. Once you have started the process of accessing your free credit report online, it is not possible to stop and start again. The credit report agencies may ask you about anything on your credit report to verify your identity. Therefore, collect the following information before you start:
Credit card numbers
Bank name
Banks that issue your credit cards
Loan account numbers
Previous addresses
Prior car make and model
AnnualCreditReport.com
The only online resource authorized by the federal government and Maryland to obtain your annual free credit report is AnnualCreditReport.com.
For how to access this website, watch the follow demonstrations.
Using AnnualCreditReport.com
Part 2 - Print Your Credit Report
Additional Free Reports in Maryland
Under Maryland law, you can obtain a second copy of your credit reports free each year. To obtain these reports, you must call each agency:
This site is brought to you by Towson University's Financial Services, DECO EEOL and the Maryland Coalition for Financial Literacy with a grant from the BRAC Higher Education Investment Fund, administered by the Maryland Higher Education Commission.
The MD Attorney General's website offers this advice about monitoring your credit report:
Inaccurate information often appears in consumers' credit reports. In July 2000, Consumer Reports magazine reported that half of the credit reports they surveyed had serious errors in them. These errors could result in your being denied a credit card, an insurance policy, a job or a mortgage. If you aren't aware of the errors until you apply for the new credit, loan or job, you may not be able to get the report corrected in time.
That's why consumers should check their credit reports from time to time, and especially before applying for a major loan or a mortgage.
By law, Maryland residents are entitled to one free copy of their credit reports from each reporting agency each year.
You are also entitled to a free copy of your report if you have been denied credit and the company you applied to tells you it was because of something in your credit report, or if you are unemployed, are on welfare, or have been a victim of fraud.
8000 York Road | Towson, MD 21252 | 410-704-2000
Using AnnualCreditReport.com
