Misconceptions about your free credit report
Maintaining good credit — which can help you enjoy preferred rates on loans, even insurance — is like maintaining your good name. You want to be spoken of in only the best of terms. That’s why it’s important to review your free credit report once each year.
By checking your credit report, you can see who has made inquiries on your credit-worthiness and ensure the accuracy of the information provided to lenders and creditors.
Yet some common misconceptions about credit reports prevail — and even prevent some people from performing this recommended financial maintenance task:
- Your credit score will drop if you check the report. Only “hard inquiries” by lenders and creditors can bring your credit score down. Checking your own score is considered a “soft inquiry” and has no effect whatsoever on the score.
- Closing old accounts helps your score. Long-term positive history accounts have a very good effect on your credit score. In the long run, it’s better to close newer accounts and leave your older accounts open.
- Paying off a past due account will immediately improve your score. Once reported, a past due account can stay on your record for up to seven years – whether paid in full or not. So, don’t expect that bump in your score to come anytime soon.
By law, every American is entitled to one free annual credit report from each of the three major credit bureaus — Equifax, Experian and TransUnion. To request your free credit report today, visit AnnualCreditReport.com or call 1-877-322-8228. Be prepared to provide your name, address, Social Security number and date of birth when requesting your report.
This article was reprinted from a First Command Financial Services publication.
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