The three major credit bureaus recently announced that Americans can get their credit reports every week for free until April 2021. And while it is important to review your credit profile, be aware that what you’ll see on these reports isn’t the whole story.
Here’s why there’s more to protecting your finances than checking out free credit reports.
Stay Informed To Safeguard Your Finances
Access to free credit reports from Experian, Equifax and TransUnion is designed to help Americans safeguard and manage their finances during the COVID-19 pandemic. While offering free reports weekly is a big shift from the original offer of one free report each year, more isn’t necessarily better.
This is because a credit report shows your account activity and payment history, but not your credit scores. And unless you understand what everything on the report means, you might get confused trying to interpret the information.
While the offer for free credit reports is compelling, you’ll need to purchase additional tools from each bureau to access each of your credit scores or receive credit monitoring and alerts.
Alternatively, you can sign up for a ScoreSense membership that offers all three of your credit reports and scores, daily monitoring and alerts, up to $1 million in identity theft insurance, and much more, in one convenient place.
Why Credit Scores Matter
Your credit scores are the numbers lenders and creditors use to determine your creditworthiness. Each score, which can range anywhere from 300 to 850, is an important factor in determining things like loan approvals, credit card approvals and interest rates.
Credit scores may also help determine whether a landlord will rent you an apartment, or if a service provider will accept you as a customer.
Credit Report Information
It’s a wise practice to review your credit reports regularly, and once a month is beneficial for early detection of suspicious activity, such as accounts you don’t recognize, wrong balances, late payments you know you didn’t miss, or incorrect personal information. All of these activities impact your credit scores, so it’s in your best interest to ensure what’s being reported is correct.
Fraudulent activity is usually associated with identity theft. When you see incorrect information due to fraudulent behavior, it’s a signal to issue a fraud alert, freeze your credit and file a dispute to have the activity removed.
Early fraud detection is key to mitigating the damage that unauthorized activity can have in both the short- and long-term.
3 Bureaus, 3 Credit Scores
It’s also beneficial to review your credit report from each bureau, particularly because different information can be reported to each one. Every credit bureau works independently, and while they share some information among them (such as a fraud alert on your account), each one receives data from different sources.
In addition, lenders and creditors aren’t required to report to all three, so they may choose to report to only one or two. This is why you’ll see differences among your three credit scores.
Credit Monitoring Is Key
Take note that the offer of free weekly credit reports does not include credit monitoring or alerts. This means it will be your responsibility to scrutinize your credit reports each week to detect suspicious changes or unauthorized activity. Today more than ever, it’s critical to take steps to protect your good name and finances from identity thieves.