Checking My Credit Report

First off, you want to use the free service at AnnualCreditReport.com. (Yes, that is the right link. No, I don’t make any money if you click it.)

During my credit counseling sessions we advise our clients not to use TransUnion because they force you to sign up and create an account. Because we are in a quasi-public area, we only walk clients through the Experian or Equifax versions and then close the browser to protect their privacy and then we tell clients to check the other versions on their own. Be forewarned!

The other day, Doctor S from FinanceYourLife asked me (via Twitter) how I checked my credit score and how much it cost.

I use Equifax because a long time ago I signed up for their subscription service for checking my credit. However, I’m not that happy with it. I get weird service expiration messages all the time and a few times I think was double charged on some months. It’s kind of a mess that only ended when I did not tell them my credit card number when it expired. Instead, I now pay as I go on a different credit card for $10.95 for each credit report with score, aka Score Power.

I have been monitoring my credit lately to see if I wanted to make the move for a new car loan and generally try to improve my score as much as I can with debt repayment and understand what it’s showing from a real world perspective versus the theory that I teach as a volunteer.

In May 2009, my score was 705, after many months of being only 689 (as of May 2008). Recently I had to pull a copy of my credit report and in July 2009 it said my score was now 717. I compared my reports side-by-side and clearly the score improvement all comes from diligently paying down my debts (my mortgage and credit cards).

However the thing that really gets my goat is the age of my credit accounts. I still have the Amex I got my freshman or sophomore year of college over 15 years ago, and yet my accounts are still considered very young. This is bizarre as I signed my first educational loan when I was 16 for private school prior to my first credit card. So does this mean I should have opened a credit card in high school and I’d have another 20 points to my score now? I hope not because I don’t think I could have handled the responsibility back then. Exactly how old does the oldest account have to be? Wait for it… “FICO High Achievers opened their oldest account 19 years ago, on average.” 19 years?! I’m not even 40 yet!

The average age of my accounts is 10 years old with my most recent credit account being opened almost 3 years ago. But I should be lumped into the highest category since “Most FICO High Achievers have an average age of accounts between 6 and 12 years.” What gives?

Clearly the one thing dragging me down is an errant emergency room bill that never got to me till it went to collections 4 years ago. But even so, you can have a blemish on your credit report like that, and still have a great credit score. The main thing is steady on-time payments for 2+ years, don’t open a lot of credit accounts and use the credit you do have in a responsible manner.

I probably won’t be checking my scores again till Christmas since I don’t really need it. It’s a little too expensive to check it every 2 months just for my own ego/progress measurement’s sake.

P.S. – BTW, Doctor S has a great blog for the under-30 audience. He’s just finished his first year of blogging and he runs a Feedburner feed to which you can subscribe.

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