Credit Card News: Your Money

Thirty-five percent of adults have never looked at their credit reports, according to a recent study of the financial habits of Americans.

Among older and younger folks, the number is even higher: 44% of seniors and 41% of Millennials haven’t ever checked their credit reports.People between the ages of 30 and 49 were most likely to stay on top of checking their credit ratings. But 14% of people said they go more than a year between credit report checks.

Financial professionals recommend checking credit reports at least once a year, with three times being preferred by many. Up to 80% of credit reports contain at least one mistake, so reviewing them on a regular basis is important in order to maintain the best possible credit score. Tens of millions of Americans are affected by credit report errors, according to the Federal Trade Commission.

The three big bureaus

Experian, TransUnion, and Equifax are the three major credit bureaus that collect information about consumers’ payment habits. From these reports, credit-scoring companies, such as FICO, assign numbers to people, known as credit scores. These range from 300 to 850, with anything above about 700 considered to be good or excellent credit. Lenders use these scores to determine whether or not a potential borrower is a risk.

Credit reports vary between the three bureaus, so it’s important that people carefully review their report from each one. Mistakes on one report may or may not be replicated on another. If an error is found, folks can write to the bureau to dispute the information and correct it. They can also contact the creditor that gave the faulty information to the credit bureau, if they know. There are ways to correct errors and ensure that credit reports are correct; but in order to do this, people must first look at their reports and spot the mistakes.

Having a high score pays off

People with higher credit scores are likely to be offered lower interest rates on credit cards, mortgages, auto loans and all types of loans. They may also have an easier time being approved for an apartment, getting a job, and being approved for rewards credit cards.

The study included a nationally representative sample of 1,000 adults in the continental U.S. and was conducted via telephone. Interviews were given in both English and Spanish and took place April 16-19, 2015.