Peggy Olive, Extension Financial Capability Specialist
UW-Madison School of Human Ecology
Total Time – 10:29
00:09 – Tips to get personal finances in order
00:58 – Why check credit
01:59 – Credit report vs. credit score
02:41 – What to look for in credit report
03:53 – How to correct information on credit report
05:09 – How to get credit report
06:35 – Is there a fee to get a credit report
07:36 – How often to check credit report
08:38 – How to get email reminders to check credit report
09:19 – Other information on Extension credit report website
10:22 – Lead out
Lorre Kolb: Keeping your credit in check. We’re talking today with Peggy Olive, UW-Madison Extension Financial Capability Specialist and I’m Lorre Kolb. Peggy, with the start of a new year many people think about getting their finances in order, what are things that would help people in this process?
Peggy Olive: There are just some financial basics that we all need to pay attention to, and you’ve probably heard all these, it’s just kind of taking the time to stop and do them like having a budget, which means knowing how much money is coming in, knowing how much is going out. Having knowledge about your debt payments and your monthly bills. So kind of having a handle on when are your bills due; your plan to pay them off; how much interest you’re paying. And then even having that cushion. So setting up a little bit of money for the future, your emergency savings for those longer term goals. So those are just some of those basics we try to help people think about. And it’s a great time of year to start off a new year with those goals in one of the goals.
Lorre Kolb: Can you talk a little bit about the importance of checking your credit?
Peggy Olive: Yes, absolutely. So everyone who has an open line of credit that they’ve had that credit for six months or more, and if that creditor chooses to report to the credit bureaus, they will have some kind of credit history at one of our three major credit bureaus. Those are TransUnion, Equifax, Experian. And nobody is going to be out there making sure that information being reported to the creditors is accurate, it’s up to date and it belongs to you, if you don’t do that for yourself. So there’s information that people are keeping track of you, but they don’t know if it’s accurate; they’re just reporting what kind of comes through their desk. So it’s so important for everyone to just, you know, hit the pause button, spend a little bit of time, at least once a year to order their three credit reports from those three bureaus just to see what’s in there.
Lorre Kolb: And what’s the difference between a credit report and a credit score?
Peggy Olive: So your credit score is just an algorithmic kind of recipe that’s made up by the different credit bureaus and it’s based on the information in your credit report. And so sometimes people get really focused on what’s my score, what’s my score? But usually the typical person may have hundreds of credit scores, maybe even a thousand different credit scores. So it’s more important to focus in on the credit report, because whatever score, variation or scoring model is being used, it’s going to come from information that’s on your credit report.
Lorre Kolb: And what should people be looking for in their credit reports?
Peggy Olive: Well, you want to do a quick scan, make sure just the personal contact information is accurate. It has, you know, your addresses. It may list an employer, it may list a few different addresses if you’ve moved in the past two years. Of course, checking if it lists your Social Security number, you can request it to just list the last four digits if you’re concerned about security. So looking at those basics and then start looking through those lines of credit. So looking for if there’s a credit card listed it, does it belong to you? And sometimes it’s a little tricky because what you think you have there’s a credit card company might be a different overarching name. So even just figuring out matching your credit cards to the name on the report and if you have a car loan or a mortgage or making sure that all of the lines of credit that are listed actually belong to you. And also making sure that they’re up to date. So if you’ve paid off that car loan, making sure that’s reflected in there, or if it says you have a missed payment and you know you didn’t miss a payment, and then that’s an opportunity to actually fix up that information in your credit report.
Lorre Kolb: So if there’s information that’s incorrect. Would the person contact the credit card for which that information is not? They wouldn’t contact one of the three credit companies.
Peggy Olive: So when you order a copy of your credit report, they’re required by law to give you information about if you find an error or something you believe is inaccurate or a mistake or misleading in your credit report, they have to tell you how to go about fixing that error. So usually there’s a form letter or else a website address. And typically it has to be done in writing. So it’s not something you can just pick up and call and say, hey, I found a mistake. So that let’s say it shows a late payment and you know, you didn’t have any you can fill out that form and say, this is the concern. And you could certainly absolutely make a copy of that and send it into your credit card company, if, this is just for an example, you still have that credit card open. So just to make sure that information is accurate, you can’t change information just because you don’t like it and you’re not happy with it. But if there’s something that’s not accurate and ideally you have proof – copies of on-time payments, then you can go about fixing it.
Lorre Kolb: And how does one go about getting a credit report?
Peggy Olive: It is, I was about to say it can be very easy, but sometimes people run into glitches. So there’s three different ways you can get it online by going to the annualcreditreport.com. So it’s annual credit report dot com. You can also call their toll-free number and you can also download on our Extension Credit Report page or on annualcreditreport.com you can download a paper form if you’d rather mail that in. So most people these days seem to order it online. And when you go to order your credit report online, you have to take a little quiz on yourself where you have to answer questions about, you know, I had a car loan from this company or this amount or I’ve lived at this address. And to be honest with you, I have failed that quiz on myself. So, you know, I might not remember how much that car loan was for in 1989 or whatever it might be. And if that happens, it says you need to send in a paper request. And then the instructions might also say you also need to prove that you’re you because they don’t want just anyone having access to your credit history. So you might have to send in a copy of a driver’s license or a copy of a bill at your current address. Just to make sure you’re you and you’re at this address.
Lorre Kolb: And so ordering your credit report doesn’t cost anything?
Peggy Olive: It is absolutely free. So you can, everyone can get one free credit report from each of the credit bureaus or three credit bureaus every 12 months. So there’s other cases, you know, if somebody has been turned down for credit or if, for example, if they’re on unemployment looking for a job, there’s other situations where people can get additional free credit reports, but everyone can get at least that one free one. And when you order online, the biggest thing to know is you never have to enter any credit card information. So sometimes web sites might be tricky and they might try to sell you a credit score because a credit score is not included in your credit report. So just know, you do not have to purchase a credit score. You do not have to enter a credit card the actual credit report to order that is free.
Lorre Kolb: How often should people check their credit reports.
Peggy Olive: Doing it more frequently is usually better. Well, it’s absolutely better than never doing it. So some people like to order the credit reports, like ripping a Band-Aid off. They like to just once a year, maybe on January 1st, they sit down and get all three of their credit reports. We here at Extension, we have on e-mail reminder campaign that people can sign up to get e-mail to remind them to check one of their reports every four months. And the reason we chose to remind people every four months is so that if there is something that shows up in your credit report during that year, it might be kind of a red flag or you can keep an eye on your credit report throughout the year. I would also say that each credit report from the three bureaus might be slightly different. You might have a local creditor that reports to one or not to the other, or they might to all three if it’s major, but they might not. So even just keeping an eye on all three reports throughout the year is a great idea.
Lorre Kolb: So how does one go about getting those reminders?
Peggy Olive: You can go to our web site, it is fyi.extension.wisc.edu/creditreport or just Google UW Extension credit report. And there right on the main page there’s the sign up for these reminder emails. Anyone is welcome to do that. We have over 1000 Wisconsinites in 71 out of our 72 counties who are signed up for reminders. And then also in a few dozen states around the country. So anyone can sign up just to get that reminder, saying, hey, you know, it’s been four months, have you checked your credit report lately?
Lorre Kolb: What else can people find on the Extension credit report web site?
Peggy Olive: Well, in addition to that form to order your credit report and to the link for annualcreditreport.com, the one official ordering site, we have lots of other information about, you know, how to read your credit report, how to understand what’s in a credit report, how long information stays in a credit report; that’s something people may not understand if it stays in seven years or 10 years, if you miss a payment and then how your credit report is used to create your credit score. So some information tips about how to boost your credit score based on what you’re reading in your report, such as being sure to make on-time monthly payments to all those creditors that are reporting and keeping, if you have a credit card that you use, making sure that you keep your spending limit low, the lower the better in terms of boosting your score. So there’s all sorts of tips that people can take away and they know that it’s trusted, vetted information from the university.
Lorre Kolb: We’re talking today with Peggy Olive, UW-Madison Extension Financial Capability Specialist and I’m Lorre Kolb.