REVIEW: AnnualCreditReport.com

When my wife and I bought our first home 4 years ago, we had lousy credit. It wasn’t subprime bad, but it wasn’t anything to rave about either. Our poor credit rating was the result of our nonchalant ambivalence toward debt and money in general. We bought a brand new car when we were first married, and had slowly built up quite a nice pile of credit card debt by buying things today with tomorrow’s cash. We ate most of our meals out instead of cooking at home. We bought books when they were new, rather than waiting to get them from the library for free. Be bought a new car instead of buying used. We generally didn’t pay attention to where our money was going. Most of the purchases and credit debt was in my name, since my wife was a student and I was the one who had the full time career.

That was then.

Flash forward 4 years and we’ve paid off our debt on the credit cards and 2 car loans as well. And all the while, I was increasing my credit score. How do I know? I checked.

We’re getting ready to purchase a bigger house (our growing family is pushing the limit of our current homestead) and wanted to do our homework before each step in the home buying process. Since we were preparing to shop around for the best lender, we knew one thing we needed to know was where we stood on our credit rating. My wife really wasn’t all that interested, so I took on the task of lender shopping, and hence credit checking as well.

I pulled my credit report to check my credit score from each of the 3 credit bureaus: Experian, Equifax and TransUnion. I used AnnualCreditReport.com and lo and behold, what to my wondering eyes should appear but the fact that I rebuilt my Experian score from 636 to 873 in 4 years! It probably took less than 4 years, but I hadn’t checked in that long.

I am now considered a Prime Plus borrower. Only 19% of borrowers have a credit rating better than mine. Not bad.

www.AnnualCreditReport.com

The site is free and secure. Unlike virtually every other credit report site on the web, AnnualCreditReport.com does not require you to sign up for any credit-monitoring program. It also doesn’t require you to purchase your credit score to get your credit report, although you can purchase your credit score in addition to obtaining your free credit report, but it’s not required you do so.

The first thing you see when viewing the site is a page requesting your State of residence. After you have selected the appropriate state, you are directed to a basic data entry screen. For this stage you’ll need some personal info. First and last name, social security number, date of birth, and current address.

After that, you get to choose which credit bureaus you want to get a report from. You can choose, one, two or all three. You only get 1 free credit report from each bureau every year. This is important because if you aren’t planning any major purchases you should just pick a different bureau every 4 months. This way you have free, albeit manual, credit monitoring in place since most erroneous marks on your report will show on each bureau’s report. Since we are planning on taking out a mortgage in the next month or two, I ordered a report from all 3 bureaus. I did this to be absolutely sure each one was clear and free of errors.

IDENTITY VERIFICATION:

After selecting the bureau(s), you get challenged again for your identity. The text looks something like this:

“We need to ensure you are really Mister X.
We protect your privacy by ensuring that your personal credit report can only be viewed by YOU.

Here’s how it works:
We confirm your identity through a series of questions based on the information in your personal credit profile.
Your answers are compared to the information in your personal credit report.
You will have access to your online Personal Credit Report when enough correct information has been confirmed.”

They then ask you a series of questions pertaining to items found in your credit report. For example:

“According to your credit profile, you may have opened a mortgage loan in or around January 2004. Please select the lender to whom you currently make your mortgage payments. If you do not have a mortgage, select ‘NONE OF THE ABOVE/DOES NOT APPLY’”

A word of advice: make sure you have your current bills or last month’s bills handy for this part of the process. You may not have a problem answering what bank your mortgage is with, but providing the account number for your car loan might not jump so easily from your mind.

After 3 or 4 of these types of questions, you are asked if you would like to order your credit report with score or opt out and continue to the free credit report. If you want to check your credit score, it will cost you a small amount. Experian charges $5.95 for their VantageScore, and both Equifax and TransUnion offer your FICO for $7.95. If you choose to purchase any of the 3 credit scores, you’ll be prompted for credit card information. After this stage, you finally get your free credit report!

Be sure to save your report. Most bureaus allow you to visit the web site for your report for up to 30 days after this point, but it’s a good idea to save or print a copy for your personal records.

The report is fairly straight forward and each bureau does an excellent job of presenting information along with your data, for example: paragraphs that explain why certain factors on your credit report are important, and how you can improve those factors.

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