Reader David recently commented about how an error on his report had him pay more than he was supposed to on a recent mortgage loan. The gist of the story is that before a credit card company wrongly reported a late payment or some other adverse note on his credit report, his FICO was 830. (he says bankruptcy, but credit card companies can’t put that) Afterwards, his score fell to 750. He called the credit card company in June of this year to fix it, which they said they would, and then he forgot about it. This week, at the closing, he learned that his score was still in the 750 range because the credit card company didn’t do what they said they would and he failed to follow through. The end result is that for the next 30 years, or however long the loan is, he will be paying for the mistake and him not following through. It’s a terrible situation but there’s little left to do.
This underscores the importance of frequently requesting your credit history from the three bureaus through the only government sanctioned free credit report system – AnnualCreditReport.com . It was created because of the Fair Credit Reporting Act and it lets you get one report from each bureau every 12 month period. You can get one from Experian in January, then Equifax in April, then TransUnion in September, and then Experian that following January. That will get you the report only, which you can review for errors. If you find any, dispute them with the reporting agency. AnnualCreditReport.com is the only official free credit report website, all the others involve signing up for some trial service that’ll cost you $30 a month or some other kind of scheme.
As for your score, you won’t be able to get that for free through AnnualCreditReport.com. You have a few options for this. First, you can use one of the free credit score estimates tools . They are only estimates (Credit Karma  pulls an actual TransUnion score, but you need to provide all the typical identity information) but with your credit history in hand, they may be quite accurate. Another option is to use MyFICO , that’s the credit score service offered by Fair Isaac Corporation, the creator of the FICO score equation. It’s not free, I’ve never used it, and you can find discount codes online everywhere. I do know that hardcore credit score watchers use it often and post their scores as a badge of honor, so it passes their tests.
If you were to pick, watching your score or watching your report, I’d watch your report. It’s free and it’s what affects your score. Keeping your credit clean, from both your own actions and the bureau’s errors, is crucial to keeping your credit score as high as possible. With the current credit crisis, it’s now critically important to get that score as high as possible so you can get the best possible loan for whatever your needs are.