Free Tools to Check and Protect Your Credit
Your credit score and report represent your financial reputation. It can affect buying a home or car, how much you pay for insurance, if you are offered certain jobs, what apartment you rent, and if you can get a loan or line of credit to start a business. You may think, “If my credit score is so important, I should be able to access it for free.” The Federal Trade Commission (FTC) thinks so too. The Fair Credit Reporting Act requires the three credit reporting agencies—Equifax, Experian, and Transunion—to each provide you with one free copy of your credit report every 12 months.
Checking Your Credit
To make things simple, the three credit reporting agencies put together one site where you can get a comprehensive report: www.annualcreditreport.com. This is where you should go for a free credit report.
Chances are you’ve seen or heard at least one commercial for a website offering a free credit report. These websites are in business to make money off of you one way or another. Either they may collect and sell your contact and/or credit information, or they may start to charge you after a trial period that is difficult to cancel. Avoid these websites, no matter how catchy their jingles may be.
You’re not limited to viewing your credit report (which contains your score, along with other important credit information) only once a year from all three of the reporting agencies at once. For a more current snapshot, request a report from one of the agencies every four months. For example, request your report from Experian in April, from Transunion in August, and from Equifax in December. This way, fraudulent charges or other mistakes are less likely to slip by, unnoticed.
Protecting Your Credit
A large number of electronic transactions happen every day. Responsible companies do their best to verify the person they’re dealing with is who they claim to be. Unfortunately, there are those who are always on the lookout for personal data. They use these details to fool verification systems in order to access and abuse others’ credit. We call this identity theft.
Protect yourself with preventative measures. Regularly check your accounts for records (like newly opened credit card accounts) that you don’t recognize. Change your passwords every few months and don’t store them in any online services. Only log into sensitive accounts and make online transactions over Internet connections you’re absolutely sure you can trust (in other words, not the free one at the local coffee shop).
Unfortunately, there are still a frighteningly broad variety of ways someone can collect your personal details. Even major companies are having trouble keeping data secure. You could be perfectly diligent about preventing identity theft, and there’s still a chance your information could be compromised anyway. Know which companies you trust with your identity and be aware of any security breaches in the news.
The FTC has plans you can follow for most identity theft or compromised data situations at www.identitytheft.gov. In combination with responsible spending and on-time payments, diligently monitoring your credit score will help build your creditworthiness into a financial strength that will earn you lower interest rates and other opportunities in life.