Take advantage of free credit reports

Article written by Mary Metten, Health and Well-being Extension Educator. 
Originally published in the Kenosha News.

Incorrect information on credit reports is among top consumer complaints to the U.S. Consumer Financial Protection Bureau.

In Wisconsin in 2020, almost 1,200 individuals filed a complaint about credit reporting with the CFPB. The top complaint involved incorrect information on reports, followed by problems with a credit reporting company’s investigation into a problem.

“Sometimes incorrect information is a simple data entry error, and other times, it could be a sign of fraud,” says Peggy Olive, UW-Madison Financial Capability Specialist. “It is up to each individual to look over his or her own credit report for old information that should be removed, common mistakes, or signs of identity theft. Better to discover an error yourself than to have a creditor find it first.”

Credit reports can affect obtaining an affordable loan, insurance policy, or even getting a job. Because credit reports are so important, federal law gives everyone the right to request free reports annually.

Throughout the pandemic, consumers have been able to order a free credit report weekly. This will continue through April 2021; then returning to a total of three per year.

Free credit reports

You can request the reports at the official website AnnualCreditReport.com, through the mail using the request form on their site, or by calling 877-322-8228.

The “Check Your Free Credit Report: 2/2, 6/6, 10/10” campaign from the UW-Madison Division of Extension helps you remember to check them regularly.

Anyone can sign up to receive the reminders on 2/2, 6/6, and 10/10—at fyi.extension.wisc.edu/creditreport. More than 1,300 Wisconsinites from 71 counties have already signed up. This will be helpful after the ability to order credit reports weekly ends after April.

“We know the added nudge from the reminder emails helps people to follow through on ordering their free credit report,” says Olive. “In our 2020 yearend survey of campaign participants, around one-third had checked their credit report before signing up for an email reminder. After getting email reminders, almost three-quarters of participants had checked their credit reports in the past year.”

Confusion about credit reports

The Extension yearend survey asked participants about knowledge surrounding credit reports. One-quarter of respondents reported knowing little to nothing about how long information stays on a report, while others reported knowing little to nothing about how information gets on their report or how that information affects their report.

Information is placed on an individual’s credit report when a creditor chooses to report to one, two, or all three of the main Credit Reporting Bureaus. Generally, someone needs to have an open line of credit for six months in order to have a report on file.

Negative information, like late payments, can stay for seven years and lead to a lower credit score. Some negative credit events, including bankruptcies, can stay for 10 years. The good news is the older a negative event becomes, the less impact it will have on your score.

Visit fyi.extension.wisc.edu/creditreport, to sign up for reminders and find more information about ordering, reading, and understanding credit reports.