Consumers are allowed to get a free copy of their credit report each year. Chances are that most only send for it when a problem arises with a loan or a hike in insurance rates.
A better tactic is to send for the report annually and check it closely for accuracy. Consumers should look for errors about whether bills have been paid on time, if they’ve paid more than the minimum payment and their percentage of credit availability used.
All of these affect one’s credit score. The Federal Trade Commission recently completed the fifth segment of its ongoing study about the accuracy of consumer credit reporting by TransUnion, Equifax and Experian.
Here are some of the things the FTC discovered:
• Five percent of consumers had a serious-enough error to cause them to have to pay higher interest for loans and insurance.
• One in five had an error on at least one report.
• One in four had errors that could affect their credit score.
• One in five had an error that eventually was corrected after it was disputed.
• Four out of five who disputed an error had a modification to their credit report.
• One in 10 had a change in their FICO score after the errors were corrected.
• One in 20 had a FICO score change of more than 25 points; one in 250 had a change of more than 100 points.
Nowadays, it’s important to check for someone else’s name on one’s report. This information often is at the end under an “Also Known As” section. If one’s name is Thomas J. Smith and they’ve never opened a line of credit with “TJ Smith” or “Tom Smith” and they see an alternate name on their reports, they should beware that someone might have been using their credit or there might be a conflict between files.
Get reports from all three agencies at AnnualCreditReport.com, or call 1-877-322-8228. In some states, consumers are allowed two free reports per year.  

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