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Credit Report Review
What Can Credit Report Services Provide?
We’ve been reviewing credit report services for eight years. For our most recent update we spent 40 hours researching credit reporting companies. We compared pricing, the frequency with which they provide credit reports and the bureaus they provide information from. We also looked at the identity protection each offers. Our pick for best credit report service is Identity Guard. It offers the most frequent reports from the three bureaus, giving you monthly updates on each of your credit scores. It also has a mobile app to help you track your credit. Identity Guard also offers a wide range of identity theft monitoring to alert you if someone tries to use your personal information.
Identity Force is another good choice for a credit report service. It provides a full range of identity protection including lost wallet protection and alerts by phone and text. You’ll only get quarterly updates through this service though.
Another worthwhile option is Privacy Guard, which offers monthly credit reports from the three bureaus. It also includes identity protection with lost wallet protection, theft alerts and phone alerts. One drawback is that this service does not have a mobile app.
What Can I Do When I’m the Victim of a Hack?
Equifax in July 2017 and Yahoo in 2014 are some of the most recent examples of large-scale hacks that make personal information available to criminals. These can leave you vulnerable to identity fraud, including stolen credit cards and new loans being taken out in your name.
Often you’ll be offered free credit monitoring if your information is exposed in one of these hacks. These services can be useful, but they are limited and can take up to 60 days to notify you if there’s potentially fraudulent activity on your account. They can’t usually alert you if a thief uses your information to forge a driver’s license or passport and don’t monitor retirement or brokerage accounts. Some stronger services we reviewed are more comprehensive than what you’d receive in the event of something like the Equifax hack.
One step you can take is asking Equifax, Experian and TransUnion for a credit freeze. This prevents creditors from pulling your credit file without your consent. To do this you’ll have to notify each of the credit bureaus that you want a freeze on your credit file. Usually you can do this online, but in some cases you may need to call. Once you’ve requested a freeze, you’ll get a PIN you’ll use to unfreeze your file for when you apply for a line credit. Depending on the state you live in, you might need to pay a fee (up to $15) to place a freeze.
You can also put a fraud alert on your file. The alert lasts for 90 days but can be renewed indefinitely. This requires creditors to contact you for permission to open a new line of credit in your name.
Basic Facts About Credit Reports
Your credit score is the key to such things as owning a home, starting a business, getting a lower auto insurance premium and even being hired in some places. Sometimes a negative credit report is a result of some bad financial luck. Other times it is because of identity theft. Keeping track of your credit score is important to heading off potential threats or correcting inaccuracies quickly if any appear.
A common misconception is that conducting a credit check or regularly monitoring your credit report and score will hurt your credit. This is not true. When you check your credit score or report, the credit bureaus consider it a "soft" inquiry that will not harm your credit score. However, if a lender looks at your credit score or credit report, usually because you are seeking credit, this is a considered a "hard" inquiry and will be reflected in your credit score.
You are legally entitled to receive one free credit report each year from each of the three credit reporting agencies: Equifax, TransUnion and Experian. You can also request a free report if someone has pulled your report, per your request, and denied you a loan or services based on your report.
Why a Good Score Matters
Having a healthy credit score is important to your overall financial health. A good credit score, usually at a minimum of 650, is important if you need a mortgage or a credit card. Lenders use the mean score of all three bureau reports in order to determine your average score and your loan eligibility. However, several banks tend to favor the score and reports from Experian for determining your trustworthiness when you want to open an account or receive financing through them.
Your credit score can be determined a variety of ways depending on your lender. The most universally accepted is the FICO score, which is also the model used by the three reporting bureaus. Some credit reporting services use a different model when calculating your credit rating. While they can give you a good indication about your overall credit, it may not be as accurate as what your potential lender will use, but it can give you a good baseline of where your credit stands.
Credit Repair & Identity Theft
If you find some issues on your credit, there are credit repair services available that will help you find ways to correct errors and bring up your FICO score. However, you have to be careful since there are several scams that look legitimate but are actually out to hurt your credit or steal your identity. The credit repair services we reviewed are licensed. Credit counseling services are also a good alternative, though typically you will have to do most of the work yourself rather than paying someone to do it all for you.
Most of the services we reviewed have identity theft monitoring. This means you will be quickly alerted if anything suspicious happens, such as security breaches, excessive credit applications or foreign purchases with your credit card. However, not many of them offer help in restoring your identity. We do have a list of thoroughly reviewed identity theft monitoring services that will take more steps beyond monitoring to help stop identity theft and quickly help you get back on track if your personal information is stolen.
While credit reporting is typically for consumers, there are business credit reporting services we reviewed that are designed to help monitor and alert you of issues with your business credit score. This is important if you are trying to secure a business loan to grow your small business. It is also important to note that, as an employer, if you check credit scores of potential employees, you should use a specific background check service that is regulated and legal. Our sister site, Business News Daily, has a great article on background check services for employers to help point you in the right direction.
What We Looked For, What We Found
While reviewing credit reporting services, we looked at the number of services offered beyond the initial free credit report that all provide. The best credit monitoring companies watch your credit and notify you when something new has been posted, both good and bad. Some services monitor one or two of the reporting agencies, but our top three picks, along with Privacy Matters, provide alerts for all three. Usually reports are updated monthly, but some services, such as CreditReport.com, will update you with daily reports if the information is available.
One service we felt was important to look for is dispute assistance. This means that when something fraudulent appears on your credit report, the credit reporting service will step in and help you fight the reporting agencies to have it removed and your credit score returned. Most of the services offer one-on-one dispute assistance as part of your monthly subscription fee, though our lowest ranking services require an extra cost of this option. It is also important to note that this service is informational only. You are provided with the steps and forms needed, but you have to do all the work and follow through in order for the dispute to be sent.