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WalletPrep worksheet · Credit

How do you check your credit report for errors?

Name ____________________ Date __________

Key ideas

  1. Your reports are free from the official site. Use AnnualCreditReport.com, the site named by federal law. Reports there are free weekly from Equifax, Experian and TransUnion.
  2. Dispute with the bureau and the lender. The bureau must generally investigate within 30 days. The lender that reported the item, called the furnisher, must also investigate a dispute.
  3. Most negative items fall off after 7 years. Late payments and collections generally drop off after 7 years. Bankruptcies can stay up to 10 years.

Vocabulary

Credit report
A record of your credit accounts, payments, balances and some public records, kept by each of the three credit bureaus.
Credit bureau
A company that collects your credit history and sells reports to lenders. The three nationwide bureaus are Equifax, Experian and TransUnion.
Collections
When an unpaid debt is handed or sold to a debt collector after missed payments. It can hurt your credit score.
Hard inquiry
A credit check made when you apply for credit, like a card, loan or mortgage. It can lower your score a few points for a while.
Credit freeze
A free block on your credit report that stops most new lenders from seeing it, which makes it hard for a thief to open accounts in your name.

Work it out

Priya pulls her three free reports before applying for an apartment. One lists a $650 collection, a debt handed to a debt collector, that she has never heard of.

  1. Car loan
  2. Credit card
  3. Collection (not hers)
  4. Debt the report shows
  5. Collection removed after dispute
  6. Debt she really owes

Check yourself

  1. Where should you get your free credit reports?

    • A. Any site that offers a free score
    • B. AnnualCreditReport.com
    • C. Your bank's mobile app
    • D. A credit repair company

  2. Your report shows $2,300 + $900 + $400 in debts, and the $400 one isn't yours. What should it show after a successful dispute?

    • A. $2,700
    • B. $3,200
    • C. $3,600
    • D. $2,300

  3. How long can most accurate negative items stay on a credit report?

    • A. 2 years
    • B. 10 years for everything
    • C. 7 years
    • D. Forever

Your turn

Go to AnnualCreditReport.com and pull your report from one bureau. Check your name, addresses, every account and every inquiry. Circle anything you don't recognize and set a reminder to pull the other two.

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Answer key

How do you check your credit report for errors?

Work it out

  1. Car loan$9,400
  2. Credit card$1,800
  3. Collection (not hers)$650
  4. Debt the report shows= $11,850
  5. Collection removed after dispute− $650
  6. Debt she really owes= $11,200
  1. Her report shows $9,400 + $1,800 + $650 = $11,850 in debt. She only recognizes the car loan and the card.
  2. She disputes the collection online with the bureau and mails a letter to the collector, keeping copies of both.
  3. The collector can't verify the debt, so it is removed within the 30-day window. Her report now shows $11,850 − $650 = $11,200, all hers.

Check yourself

  1. B. AnnualCreditReport.com AnnualCreditReport.com is the official site authorized by federal law to provide the free reports from all three bureaus.
  2. B. $3,200 $2,300 + $900 + $400 = $3,600. Removing the $400 error leaves $3,600 − $400 = $3,200.
  3. C. 7 years Most negative information can be reported for 7 years. Bankruptcies are the main exception, at up to 10 years.