Have you checked your credit report for errors or suspicious activity recently? According to a 2013 FTC study, one in 20 people have significant errors on their credit report, enough to affect their credit score by 25 points. Twenty-five points might not seem like much, but that can negatively affect a mortgage rate by half a percent, which can cost a borrower thousands of dollars over the life of the loan.

Errors on a credit report affect more than mortgage rates: they can influence credit card rates, apartment applications, and job offers too. Because your credit history can affect many different aspects of your life and because the process to fix errors can take over a month, we recommend reviewing your credit report at least once a year to ensure that your report is correct whenever your credit history is checked.

Thankfully, getting your credit report once a year is easy and free. Due to the Fair Credit Reporting Act, you can get a free credit report every 12 months from each of the three major credit reporting agencies: TransUnion, Experian, and Equifax.

Effectively, this means you can review a credit report up to three times in a 12 month period. You could spread those reports out over the course of a year – every four months, for example – or you could review all three at the same time once a year.

Both methods have their benefits. Spreading out the reports allows you to regularly check for errors and fraudulent activity throughout the year. On the other hand, if you check all three at once, you may be able to spot and report errors and fraud sooner, particularly if the issue is only found on one or two reports instead of all three.

While you can get your credit reports from a number of different sites, many of them either charge you up front or require you to submit credit card information and charge you after a free-trial period ends. Instead, visit annualcreditreport.com. This is the only federally-approved website for free credit reports.

Covenant Trust Company is a financial services company owned by the Evangelical Covenant Church and its affiliates. Our services are available to anyone in need of asset management, retirement planning, legacy planning, gift planning, or trust services. In addition, we seek opportunities to encourage and promote healthy financial habits, and keep a personal finance blog at www.covtrustblog.com.


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