Two years ago, my wife and I decided to start watching our credit. We wanted to buy a home, and if someone were to steal our identities and run up credit card bills, it would ruin our chances of getting a mortgage. Since we were moving overseas in conjunction with my job, we searched for a credit report monitoring service. It was a good choice.

On the recommendation of a friend, we signed up for (and still use) a service called PrivacyGuard. In addition to monitoring your credit reports for changes or additions, these services usually let you obtain copies of your credit reports and FICO scores. (I have been pleased with their service. I am sure other services are just as good, but I have not tried any others. They also offer a two month trial for just a buck. My wife and I have tried it multiple times before deciding to keep it.)

There are three main companies in the credit reporting arena: Equifax, Experian, and TransUnion. Each of these companies collects personal details about millions of Americans (including you). Then they sell it to other companies at huge profits.

If you have not ever seen your credit report, you should request a copy. You are entitled to a copy if you have recently been denied credit. The law also allows you to obtain one free copy each year. There is a web site called annualcreditreport.com for this purpose, but, ironically, I could not get it to work. You can also contact the Central Source to request this free annual disclosure by calling toll free (877) FACT-ACT.

The thing I like about our credit reporting service is that it lets me see each of the three credit reporting agencies side by side. For every credit card and loan I have ever had, the service shows all of the data that Equifax, Experian, and TransUnion have on file. This makes it easy to see what data is incorrect. And then I can try to fix it.

In my case, Equifax always seems to have the most accurate data. Experian is in the middle, and TransUnion is by far the worst. When my wife looked at her TransUnion credit report, they had the wrong address– and we moved two years ago!

This bad data affects your FICO score. The score is a numerical grade of your credit history. It allows companies to rank millions of consumers based on credit worthiness at the click of a button. FICO scores are based on a 850 point scale.

TransUnion’s FICO score was lower. About 38 points lower than Equifax, to be exact. Experian was in the middle, 20 points from the highest and 18 points above the lowest.

Based on my credit score, that is a 5% spread between these three credit reporting agencies. That makes it sound good, but I think it is terrible. Their data could have a huge impact. I think it should be perfect– this is my life we are talking about, and bad data could have grave consequences. There is no room for error.

We have sent many letters disputing data in our credit report and provided updated information. But the companies still screw up. So why can’t they get it right? How hard is it for these companies to figure out, over two years, that we have moved?

Have any of you had problems with your credit reports? Was it Equifax, Experian, or TransUnion? What did you do about it?