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Frequently Asked Questions about Credit

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Credit reports include information such as the type of debts you have, current balances, payment performance, available credit, and a record of credit inquiries in the past two years. Some negative credit information may remain on your credit report for up to 7 years; bankruptcy can remain for 10 years. For more information, see Credit Reports, Credit Scoring, and Credit Criteria.

How can I get a copy of my credit report?

You may already be able to obtain a free annual copy of your credit report. A new amendment to the Fair Credit Reporting Act requires the three national credit reporting agencies (credit bureaus) to provide -- at your request -- a free copy of your credit report once every 12 months. Find out how to get your copy and when it will be available in your area at www.annualcreditreport.com.

You can also request a copy of your credit report online, by phone, or by mail from one of the three national credit bureaus, Equifax, TransUnion, or Experian (formerly TRW). For detailed information about requesting a copy of your credit report and the contact information of the national credit bureaus, see National Credit Reporting Agencies.

How often should I check my credit report?

It is a good idea to request a copy of your credit report annually to ensure that no errors exist or to resolve errors that do exist. If you find any information that appears to be incorrect, you should contact the credit reporting agency. Unfortunately, errors can occur in your credit report. To learn more about how to check your report for errors, see Checking Your Credit.

I know my credit is not good. How can I improve my credit rating?

Make sure to make payments on time and to make at least the minimum monthly payments. You should limit the number of credit accounts you have and your total available credit. Most importantly, you should limit the amount of available credit that you use. You can ask your creditor to reduce your available line of credit as you pay down the debt you owe.

It is a good idea to request a copy of your credit report once a year. This way, you can promptly clear up any errors that may appear on your report. If you need help resolving credit problems, check out Additional Credit Resources.

What is loan default?

Default occurs when you fail to meet the terms of the promissory note. This includes making late payments and failing to make payments. There may be serious consequences to your credit and your ability to borrow funds in the future. To learn more, see Consequences of Default.