You Alone + Your Money = ?

    Now that you’ll be handling all of your finances as a single person, it’s essential that you periodically review the information on your credit reports to insure the data is accurate and up-to-date. During this transitional period in your life, consider reviewing your credit reports at least every one to three months. Later, checking your reports every six months to one year is appropriate.           

During the period following your divorce, you’ll be closing joint accounts formally held with your spouse, and potentially opening new credit card accounts, as well as seeking out new types of loans, and perhaps a mortgage. Thus, it’s important to understand all of the information listed within your credit reports compiled by Experian (www.Experian.com), TransUnion (www.transunion.com) and Equifax (www.Equifax.com).            
        
Whether you obtain separate credit reports from each credit bureau for free, or purchase a three-in-one credit report that lists data from the three credit bureaus on a single report, the actual document you receive will be divided into several distinct sections.  The major sections of a credit report include:                 ·        

1. Personal Information.
This section of your credit report lists your name, current address, past addresses, date of birth, Social Security Number and details about your employment history.                 ·        

2. Public Record Information.
This section of your credit report lists any judgments, liens, bankruptcies and unpaid tax bills that are in the public record.  While most information on your credit report will remain there for seven years, the information in this section will remain for up to 10 years.                ·        

3. Credit Information.
This section provides details about every creditor and lender in your credit history, including all credit cards, store charge cards, car loans, mortgages, student loans, etc. Each item will be listed separately and is called a trade line.

4. Inquiries.
This is a detailed listing of all creditors and lenders who have requested access to your credit report.  As you review your credit report, make sure all of the data is accurate and that all of the information actually belongs to you. If you notice credit card accounts, for example, that don’t belong to you, you could be a victim of identity theft. In this situation, contact the unrecognized creditor or creditors and the three credit bureaus immediately.

Each trade line within your credit reports will list the creditor’s name, address, phone number, the type of account, the account’s current standing, as well as your payment history for that account over the past several years. If applicable, details about your credit limit, your current balance, when you made your last payment, and other pertinent details will be listed. The majority of your creditors and lenders will report updated information about your account on a monthly basis to each of the credit bureaus.                     

While the data on all three of your credit reports should be identical, it’s common for discrepancies to appear for a variety of reasons. For example, one of your creditors might only report details about your account to one or two of the credit bureaus, as opposed to all three of them. If you notice errors on your credit report, file a dispute with each credit bureau. This process can be done online or through the mail. Legitimate errors will typically be corrected within 30 to 45 days after you file a dispute. If the negative information turns out to be accurate, however, it will remain on your credit report for up to seven years.                    

For a monthly fee, usually between $15 and $30, you can utilize a credit monitoring service through any of the credit bureaus. These services will immediately notify you anytime there’s a change to your credit report or credit score. This can be a valuable tool for preventing identity theft.                    

When you request your free credit report from each credit bureau, one extremely important piece of information that will be noticeably missing is your credit score. The credit bureaus are not required to provide this information for free. Thus, you’ll wind up having to pay for it. Unfortunately, just by looking at your credit reports, it’s impossible to calculate your own credit score. Yet, this is an extremely important number you’ll need to know before applying for any type of credit or loan.

Jason R. Rich is the series editor and author of "Entrepreneur Magazine’s Personal Finance Pocket Guides." To learn more, please go to www.JasonRich.com.