How to get your free annual credit report
After one of my recent Moneyville posts – How a 1% rule can help you save – I suggested that now would be a good time to order a free credit report from both Equifax and Transunion. From that post, I received quite a few e-mails from readers who were confused as to how to actually obtain their free credit report.
When you go onto these credit bureau websites, it isn’t clear how to obtain your free credit report. Instead, most links direct you to options where you can pay either a one-time or monthly recurring fee in order to access your information online immediately. That’s how they make money off of you. But if you’re okay waiting for your report to come through the mail, you will be able to access your free credit reports once every year.
You will need to fill out this PDF document, provide photocopies of 2 pieces of government-issued identification, as well as an additional document that shows your address – like a recent telephone or utility bill. You should receive your credit report in the mail in 5-10 days.
Download and complete their Consumer Request form. Note that Quebec residents have a different form to complete. You will need to photocopy two pieces of identification – and combined, they must include your name, current address, date of birth and signature.
The three credit bureaus in the USA are Experian, Equifax, and TransUnion. According to the Fair Credit Reporting Act, consumers are eligible to get one free comprehensive disclosure of all the information in their credit file from all three credit bureaus once every 12 months through www.annualcreditreport.com.
Why you need to order your credit report
A credit report is a “snapshot” of your credit history. Lenders rely on credit reports and credit scores to help them determine your credit application approval. This affects all aspects of your life that require a judgement of your credit worthiness – such as a bank loan application, applying for a mortgage, buying a car, getting a credit card, and even when you try to rent an apartment.
Remember that a credit score and a credit report are two different things. Your credit score is a number between 300 and 900, and is constantly changing as new financial information is collected about you, and old or inaccurate information is deleted. Meanwhile, a credit report will allow you to see whether you’ve paid your bills on time, the credit limit for each of your creditors, how much you owe, and how many accounts you have open.
Be aware that you will not be able to obtain your credit score for free – you will almost always have to pay for that. Likewise, if you need immediate access to your credit reports online, you will have to pay for that privilege as well. For example, if you wanted your Equifax credit score (Canada) immediately, you would pay $15.50 for it.
Even those who are debt-free and make all their payments on time should still check their credit report and score at least once a year to monitor for inaccuracies. While you are allowed to correct mistakes and misinformation that you find in your report, the process is very slow and that lost time could cost you your dream house or might result in a personal loan being denied. Catching errors ahead of time will ensure that when you do need to apply for credit in the future, you can be confident about your credit history. Plus, ordering your credit report is free, so there’s really no excuse not to be checking every year.
I personally check my credit report and credit scores in October around my birthday. When do you check yours?
Author: Krystal Yee
I’m a personal finance blogger and marketing professional based in Vancouver. I’m a former Toronto Star (Moneyville) columnist, author of The Beginner’s Guide to Saving and Investing, and co-founder of the Canadian Personal Finance Conference. When I’m not working, you can usually find me running, climbing, playing field hockey, or plotting my next adventure.