Q: Should I get all three credit reports at once, or view them at different times over the year?
A: Once you are ready to request your free credit reports from the credit bureaus via http://www.annualcreditreport.com, you have the option of getting those reports in one of two ways: all at once, or over a period of several months, perhaps even up to a year. But to maximize your credit rating and to improve your credit knowledge, the optimal strategy is to obtain all three credit reports simultaneously. Here’s why.
What’s Wrong With Getting One Credit Report at a Time?
Some experts recommend that you get a single credit report at a time, staggering them every four months or so, so that you see your credit files throughout the year.
Under this scenario, you might retrieve your Equifax report in January, get your Experian report four months later in May, and then secure your TransUnion report in another four months, in September.
The following year you would repeat the cycle, picking up those respective credit reports again in January, May and September. Advocates of this method suggest that, to execute this strategy, you should set up email notifications, text alerts or other calendar reminders to help you keep tabs on your credit – and when to next request a credit file – throughout the year.
While this process can work for certain individuals, I strongly suggest a different method. Namely, I think you’ll be far better off getting all three credit reports at once, and signing up for a worthwhile credit monitoring service that can help you both boost your credit rating and take the hassle factor out of you trying to remember to stay on top of your credit.
So why it is most advantageous to get all your credit reports simultaneously – as opposed to waiting and getting those credit files in a staggered fashion over the course of many months? It boils down to these four primary benefits:
1) Speedier Resolution of Errors
If something is wrong in any one of your credit files, you want to know about it and get it corrected, pronto. When you pull all three of your credit reports, you’re able to instantly tell if one, two or all of your credit files have inaccuracies about your credit past. If so, you can begin disputing those mistakes immediately.
If you waited to get your credit reports, months could go by with damaging, erroneous information on your credit files without you even knowing it. And don’t forget, if you’re seeking any loans, mistakes in your credit files could cause your application to be rejected, or could force you to pay higher interest rates than you should.
2) Clarity About Differences and Discrepancies in Your Credit Files
By looking at all three credit reports in concert, you will gain clarity and insight into a host of potential differences and discrepancies contained in your various credit files. For instance, does one of your reports show that that student loan you paid off, but the other two lack that information?
If so, you’ll want to have that positive payment history (i.e. a record of your successful loan payoff) added to those two other credit files. And what about other discrepancies? Are you listed as an authorized user or a certain credit card account on your TransUnion report, but as a co-signer of that same credit account on your Equifax file?
The difference may seem subtle, but it can impact your credit rating. Lastly, have you ever pulled your credit scores and not understood why the scores linked to the Experian report came in at 700, while the score based on your Equifax file was a 675, and the TransUnion-linked score was just 658?
These score discrepancies can frequently be explained by the disparities in your credit files; disparities such as inquiries listed, amount of debts shown, or the payment track record reported in each of your credit files.
3) Better Credit Education
Perhaps the chief benefit of viewing all your credit reports together is the amazing amount of financial education you will assuredly get about your credit profile just by looking at the highlights of each credit file, and the way that similar information is presented differently in each credit report.
Every one of us learns differently, and you’ll find that you understand some aspect of your credit better (or not as well) from the reports generated by Equifax, Experian and TransUnion.
My Experience Examining My TransUnion, Equifax and Experian Reports
For example, after pulling my most recent TransUnion report, my first response was to squint a bit, because I didn’t like the way the information was presented. The tiny print on the file was hard to read. There were images that at first glance confused me.
All my accounts were listed alphabetically, making it difficult to determine or see which accounts were closed versus which ones were open. It reminded me of an engineering report with little boxes and things I had to somehow decipher. All in all, the delivery of information from TransUnion wasn’t initially attractive to me.
In contrast to the TransUnion credit report, I really liked the visual presentation on my Equifax and Experian reports. My Experian report was easy to read, presented in a clean summary-style format, and clued me in to salient points right ways, such as the number of open and closed accounts in my file, and the fact that all my accounts were in good standing with no delinquencies.
My Equifax report was also very nicely presented. With my Equifax report, I appreciated that Equifax did a lot of analysis work for me. It too told me the number of Open Accounts I had, gave me balances, available credit and credit limits on each, and then calculated my debt to credit ratio. My Equifax report also tallied my monthly payment amounts in each category (mortgage, installment and revolving debt), and informed me of how many accounts hade a balance.
So my point is simply this: each credit report had something valuable to offer; had I only looked at one report, I wouldn’t have learned as much.
To conclude, just because the TransUnion report didn’t wow me visually, doesn’t mean it wasn’t discernible or valuable – because it was. Some people like to see information presented in a text-heavy manner, with lots of words and explanations.
Others prefer charts and graphs to explain things to you. And still others like pictures or snapshot summaries. No matter what your preference, you’ll be all the more educated about your credit if you take the time to look at the information contained in each of the three reports together. As proof of this, I should note that despite my previous comments about my TransUnion report, I nevertheless did learn several valuable takeaways courtesy of that report – information I wouldn’t have grasped had I only pulled my Equifax or Experian reports.
For example, TransUnion was the only bureau to give me a summary of the length of my credit history. At the top of my TransUnion report was a statement that said: “You have been on our files since 02/1987.” This was good to know, especially since the length of credit history counts in computing one’s credit score.
The TransUnion report furthermore explained a few mysterious codes that are sometimes contained in credit reports, but not always explained. To be precise, my TransUnion report stated: “If any item on your credit report begins with ‘MED1’, it includes medical information and the data following ‘MED1’ is not displayed to anyone but you except where permitted by law.” Again, even though I had no medical debt in my file, I can imagine that this would be good and pertinent information for those trying to interpret that MED1 code.
4) More Comprehensive View of Your Overall Credit Standing
When you get all three of your credit reports at once, you’re giving yourself the same comprehensive, birds-eye view of your credit profile that many lenders use.
Especially when banks are evaluating you for a major loan, such as a mortgage, many of them will pull a so-called tri-merged report, or a 3-in-1 credit file containing information from TransUnion, Equifax and Experian.
There’s a reason that lenders want to look at all three of your reports: and it’s to have all the facts about you, and the broadest possible look at your credit rating. If lenders and creditors take that full scale approach to examining your credit, then so should you.
Credit Ignorance Isn’t Bliss
Some of you might ask: But what if I’m not seeking a mortgage? Do I really need to know what’s in all three reports? The answer is a resounding yes. Even though you may not be in the market for a mortgage, is it possible in the near future you will apply for any form of credit whatsoever – say a credit card, a car loan or some kind of a line of credit? If so, you obviously know that a bank is going to pull your credit.
But the problem is: you don’t know exactly which credit file they’ll examine. That’s why you should already know what’s in all three of those reports. Don’t take the risk of being ignorant about something missing or erroneous being in your credit file, and having that information hurt your chances of getting the credit you want or need.