It seems like every time you turn on the TV, someone is trying to “sell you” your credit report or credit score, or trying to help you improve it — for a small fee, of course. Have you ever actually looked at your credit report? It’s filled with lots and lots of information about your past and present credit transactions, including mortgages, loans, credit cards, accounts, employers, addresses, and so on. Why is it important? Because this is the basis lenders use to determine whether you’ll get a mortgage, car loan, credit card, home equity loan, line of credit, or even a charge card for Macy’s or Kohl’s or Costco. Your credit report also helps lenders determine how favorable, or otherwise, your loan terms and conditions will be, including your interest rate.

That’s where the credit score comes into play. The credit score uses criteria set by FICO in conjunction with your credit report to give you a credit “grade”, or score. These scores are between 300 and 850, with most consumers falling between 600 and 750. A score above 800 is excellent and will get you the most favorable terms and rates on most loans, whereas a score above 700 is still considered very good and will get you approved with good terms and rates by most lenders. Think of 800 to 850 as an A and 700-800 as a solid B. Incidentally, FICO stands for Fair Isaac Corporation, after the company who takes your raw credit report data and turns it into a credit score used by thousands of lenders.

One important thing to be aware of is that you can get a look at your credit report once a year for free, from all 3 of the credit bureaus: Experian, Equifax, and TransUnion. Take advantage of this! Check your credit report frequently because mistakes can and do happen, and it’s important to get the mistakes cleared up. Go to to get your 3 free annual reports. (Note is not where you can obtain your free annual credit reports; it’s a merchant trying to sell you the reports and scores.) And check the reports from all 3 credit bureaus because, although much of the information will be the same, not all of it will be identical. For example, you may have taken out a MasterCard from Citibank and used the credit card for a year or so. Experian may show your payment experience with that MasterCard exactly as it happened, but Equifax may have an error on last March’s payment (e.g., because they didn’t receive confirmation that payment was received, for whatever reason), and TransUnion may not even show this credit card on your report. You won’t know if you don’t check!

A good strategy to use is to check the 3 free credit reports sequentially throughout the year. For example, in February you might check the Experian report. Then check your credit report with Equifax in June, and TransUnion in October. That way you might catch a major reporting error that occurred more quickly than if you just check all 3 reports once a year at the same time. And be aware the annual “free credit report” offer only covers your credit report, not your credit score. The 3 bureaus may try to upsell you a peek at your credit score, or even a service that monitors your credit report or score. These are upgrades you may not need, and they cost real money. Just make sure your credit report is accurate, pay your bills on time, and you won’t need to worry about your credit score. It’ll be fine!

What happens if you discover an error with one of the bureau’s credit reports? Get it fixed! You can dispute incorrect or misleading information on your credit report. You just fill out a form or call a phone number to file your dispute. The bureau then has 30 days to investigate your dispute, usually by checking with the merchant or lender about the specific charge(s) in dispute, and provide you with an answer. Assuming the bureau confirms that you’re right, they will correct the information in your credit report. You can also add a statement to your credit report if you feel the report is somehow wrong or misleading. What you submit (up to 100 words) will go out with every credit report requested, but many lenders ignore these statements.

Credit reports also list who has requested your credit information in the past 2 years. These credit inquiries can be numerous, because many lenders, credit card companies, and retailers request these reports before extending some sort of “special offer” to you and possibly others.

Your credit information is important, so make sure it’s correct. Happy reporting!

Scott McClatchey is a Wealth Manager, CFP® with WWM financial in Carlsbad California. Scott can be reached at 760-692-5190 or