Everything you need to know about checking your credit

Back in 2011, Liana was a recent college graduate in Washington, DC, trying to get an apartment. Only one problem: She hadn’t built up enough credit to get approved for a lease. She was able to eventually sign with a co-signer, but the difficulty spurred her to take a newfound interest in her credit report and score.

That came in particularly handy when, a few months later, she pulled her credit report and noticed an error. A medical bill she had a record of paying was incorrectly reported as delinquent — “a total human error,” she says. With a few calls to the bureau, Liana was able to wipe the incorrect mark off her report and get back to building her good credit.

Even a single error reporting a missed payment can impact your credit score, which goes to show the importance of checking your credit regularly. Checking your credit means knowing what’s on your credit report and how those things impact your credit score. Reporting errors or fraudulent accounts opened by someone who has access to your personal information can lower your score: If lenders consider you a credit risk, they’ll likely offer you a higher interest rate, and/or lower initial credit lines. And landlords and utilities companies might ask you for higher security deposits. “To me, your credit report is one of the few ways you’re really measured as an adult,” Liana says. “It’s basically your adult report card.” Here’s everything you need to know to monitor, and improve, your credit report and score.

Fortunately, checking your credit is easy — and it won’t hurt your score one bit. You can visit www.annualcreditreport.com to request a free copy of your credit report every 12 months from each of the major national reporting companies: Equifax, Experian, and TransUnion®. You can also check your VantageScore® 3.0 credit score as often as you like by using CreditWise® from Capital One®, a credit monitoring service that is free for everyone to use, even if you’re not a Capital One customer. It’ll also alert you if anything meaningful changes on either your Experian or TransUnion credit reports.

It’s tempting to look at information gathered from just one bureau. In fact, the 2018 Capital One Credit Protection & Security Survey found that 55 percent of respondents did exactly that when they last checked their credit report. However, reviewing your credit history collected by all three bureaus is important because they don’t necessarily have all the same information.

Chances are you may find errors when you check your credit report. Many other consumers have: Complaints about credit or consumer reporting topped the list of grumbles the Consumer Financial Protection Bureau (CFPB) received in 2017. About 100,000 complaints came in, and of those, 55 percent were for perceived inaccuracies on a report.

Some mistakes may simply be due to a mix-up. But other inaccuracies could be of a shadier nature, due to a fraudster opening accounts in your name. If a bureau says an auto loan was recently taken out in your name, but you haven’t bought a new car since the ‘90s, that’s a red flag worth asking the lender to investigate. According to the Capital One survey, 55 percent of its respondents had experienced financial theft or fraud, and being a part of that club is no fun. When Jessica in New York City got a credit card in the mail that she hadn’t applied for, she knew something was amiss. Her instincts were right: She checked her credit report for the first time and found lots of new accounts opened in her name. Many phone calls and one credit freeze later, she was able to halt that fraudster in their tracks.

You can help protect yourself against damage to your credit as a result from identity theft with free fraud alerts. A free credit monitoring service can also help you be on the lookout for odd developments. Most will notify you if a new account is opened in your name or if there’s a big change on your credit report. The CreditWise app, for example, can send you email and push notification alerts when your Experian or TransUnion credit reports change.

So you’re still not satisfied with your score? There are steps you can take that may help lift your credit score, like paying your bills on time and having a mix of different kinds of credit, including credit cards, a mortgage, and an auto loan. You should know that applying for credit too frequently could possibly have a negative impact on your score. And try to maintain a credit utilization ratio of 30 percent or lower — it’s calculated by the total amount you owe divided by your total available credit.

Liz, from Portland, Oregon, took action after noticing a derogatory mark on her credit report for a 30-day late payment on an account that she had closed years earlier. She disputed the mark with the company, who agreed to remove it from her report. “As I am planning a large purchase (a home), every little derogatory mark has an impact on my credit score,” she says. “My score did increase 11 points after the negative mark was removed.”

For Liana, keeping a watchful eye on her credit and building up her good credit has paid off as she’s started on her next adult conquest: buying a house. Once she learned that a higher credit score could result in lower interest rates, she was glad she had taken an interest in her credit report all those years ago. “I’ve gained a lot of confidence having a higher score,” she says. High credit scores are worth striving for, and careful credit monitoring can help ensure you get all the credit — the pat-on-the-back kind — you deserve.