How to Get a Free Credit Report and Why You Should

Starting in April, it could cost you to look at your credit report. 

Since the beginning of the pandemic, the three biggest credit reporting bureaus—Equifax, TransUnion, and Experian—have offered free weekly credit reports to help consumers stay on top of their credit scores, as many people have experienced layoffs and other difficult financial situations. But on April 20, 2022, that perk will come to an end. Going forward, you’ll be able to request one free credit report from each agency every year. 

Here’s what you should know about checking your credit report. 

What is a credit report?

A credit report is a record of how you’ve handled loans and payments over the course of your financial life. In the report, a credit bureau will consolidate all of your credit information, such as how many credit cards and loans you have, and how you’ve paid down that debt. If you’ve been sued, arrested, or if you’ve filed for bankruptcy, that may appear in your report.  Your credit report will also give you a credit score, which is a points-based rating system that assesses how responsible you are with loans and debt over time. 

Your credit score is determined by a company called Fair, Isaac Co. It’s sometimes referred to as a FICO score. It uses credit history data compiled by credit bureaus Experian, Transunion, and Equifax. Your credit usage information is regularly transmitted to these three agencies. A credit score can range from 300 to 850. The better your credit, the higher your score. Perfect credit is 850.

How to check your credit report

In order to get a copy of your credit report, you submit a request to Annual Free Credit Report Request Service via phone or mail. You can also request one online at AnnualCreditReport.com, which is the only website authorized by the federal government to give you annual access to a free credit report. 

You’ll need to input information, including your full name, your social security number, your date of birth, your phone number, your current address, and any previous addresses from the last two years. Once you do that, you can choose which credit bureau(s) you want to receive a report from. 

You can ask for a report from all three, if you choose, but remember that you only get a weekly free report until April 20, 2022. After that, you may want to space out your requests to the bureaus, depending on how frequently you check your credit report. You can also pay to check your credit report more than once, and the bureaus can’t legally charge you more than $13.50 for the report. 

Why it’s important to check your credit report

Financial institutions use your credit report and your credit score to determine whether or not to lend you money. Additionally, rental property owners, insurers, or employers may look at your credit report. So you want to check your credit report to know where you stand should you want to apply for a loan or get a new job. 

You should also regularly check your credit report for errors, such as incorrect personal information, or accounts that you never opened, or that you already closed, as those things might be indicators of identity theft, which can affect your credit score. Reports of credit card fraud have increased in recent years, surging 44% between 2019 and 2020. With that in mind, you may also want to sign up for a credit monitoring, or identity theft protection service, to keep close tabs on your credit file. 

Your credit score is determined mostly by how timely you are with your credit card payments, and your credit card utilization, which is the percentage of the entire amount of credit that you have available to you, that you’re using at any given time.

In order to achieve and maintain a good credit score, make sure to pay your bills on time and in full, and that you’re not maxing out your credit cards. While common wisdom says you shouldn’t use more than 30% of your credit limit, you probably want to use far less than that percentage to get a good credit score.