Buy milk, take out the trash and now check your credit report? Starting April 20, 2020, consumers now have the ability to check their credit reports weekly for free through April 2021 via AnnualCreditReport.com. Previously, free reports were only available once every 12 months.
The increased access was a mutual decision between the U.S.’s three largest credit reporting agencies: TransUnion, Equifax and Experian.
“We are making credit reports more accessible more often so people can better manage their finances and take necessary steps to protect their credit standing,” said CEOs Mark W. Begor, CEO Equifax; Brian Cassin, CEO Experian; and Chris Cartwright, CEO TransUnion in a joint statement.
Here’s why you may want to check your credit report more frequently.
Coronavirus Scams Abound
In nearly every crisis, criminals find opportunity. Some swindles are more sophisticated than others and even someone who considers themselves savvy may find that they were duped by a COVID-19-related scheme.
“Phishing scams have gone way up in the past couple of weeks,” says Bruce McClary, spokesperson for the National Foundation for Credit Counseling.
If you inadvertently gave out any personal information to what you thought was a bank, lending company or other institution, fraudsters may be able to leverage that into opening fake credit lines in your name.
If identity theft or credit fraud is taking place, it’s very critical to act quickly before your credit score is damaged. “Being able to see that info as soon as it’s on your credit report puts you way ahead of the curve compared with only checking your report once a year,” says McClary.
If you see a mistake on your credit report, you’ll want to act right away. Contact any one of the three credit bureaus if you see something amiss so they can place a fraud alert on your accounts. A fraud alert works similar to a credit freeze in that it requires creditors to verify your identity before opening a new line of credit, sending an additional card or increasing your credit line on an existing account.
Deferred Payments for Coronavirus-Related Reasons Should Not Affect Your Credit
The CARES Act includes specific provisions to protect those experiencing coronavirus-related financial stress from seeing any negative impact to their score.
This means that if you are approved for a COVID-19-related forbearance, delayed payment or other payment arrangement with your lender or loan servicer, they cannot report you as being delinquent and your credit score will not be impacted during the time period of your modified payment schedule.
The best thing to do if you know you will fall short on a payment or bill is to contact the lender proactively. If they know it’s due to coronavirus-related hardship, most lenders and creditors offer alternative solutions without penalizing your credit standing.
There’s an important caveat to this rule: If you were already reported as being behind on your payments by your lender, they can continue to report you as delinquent even if your current reason is due to a COVID-19-related cause.
Fill the Gaps With Other Loans
There’s a lot of buzz surrounding various federal relief efforts like the Paycheck Protection Program and Economic Injury Disaster Loans. But those are centered around channeling funds to businesses. If you’re looking for other types of relief—like a 0% APR credit card, a mortgage refinance or a new car loan, it helps to know your credit report doesn’t have wrong information or mistakes, especially if your financial situation has been affected recently.
“Every 30 days your credit reports go through an entire cycle of updates from your active lenders. Your credit report today is going to be materially different every 30 days,” says John Ulzheimer, a nationally recognized credit expert and former FICO and Equifax employee.
The Small Business Administration recently notified nearly 8,000 applicants for EIDL loans that their personal information may have been compromised. If you check your credit report regularly as per the new agreement between the credit reporting agencies, you’ll be able to see if anything is amiss in your own information and take steps to correct it.
To review your credit report with all three agencies, go to AnnualCreditReport.com and submit your request. You can choose to review the reports from one, two or all three agencies. Be aware that although your report will contain your full credit history, it will not include a credit score.
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