Free Credit Report
In today’s world most of us are largely known as a number; that which identifies us as a good credit risk and a stable financial citizen. While assuredly nothing personal, the number which denotes our credit worthiness nonetheless says volumes about us to the people deciding whether we can have a mortgage for our home, a loan for our car, or a line of credit for education expenses. This number of course is known as a credit score – and it is a number that is assigned to a person based on a number of factors including debt to income ratio and credit history. Late payments and loan default bring the credit score down, while on-time payments raise the credit score. Each time a person applies for credit – be it a credit card, a mortgage, a car loan – the lender will check the potential borrower’s credit score to ensure that they are a good risk to whom to extend credit; meaning that there is a strong likelihood that they will make their payments on time and will not default on the loan.
Anyone who has credit has a credit score. And the credit scores in this country are kept track of by three separate credit bureaus – Equifax, Experian, and TransUnion. In the spirit of financial responsibility, it is absolutely essential that consumers know their credit scores – as issued by the three credit bureaus. Luckily, there are a number of ways in which consumers can receive a free credit report.
Obtaining a Free Credit Report
For one, all consumers, in the name of yearly financial maintenance are entitled to receive a free credit report from all credit bureaus, as dictated by the Federal Trade Commission’s Fair Credit Reporting Act. By visiting a central website, consumers can request their free credit report from all three agencies at one time or separately. The consumer will then receive their free credit report by mail generally within two weeks of their request.
Additionally, depending on the state in which a consumer lives they may be entitled to a free credit report within a certain period of time following a denial of credit from a lender.
Consumers may also be able to procure a free credit report through particular lenders with whom they are working, as well as through particular organizations dedicated to helping consumers repair their credit.
The Benefits of a Free Credit Report
Obtaining a free credit report on a fairly regular basis can ultimately protect a consumer in a number of financial situations. Most importantly, no matter what manner of transaction into which they enter, they will always do so with their eyes open; understanding their credit score and how it could affect the terms of any loan for which they may qualify.
Knowledge is power in any situation; and knowing the details of their credit report arms consumers with knowledge and power. Having a free credit report on hand can:
- Alert consumers to any possible errors that may exist in their credit history so that they may take steps to amend it before it has the chance to affect them further.
- Make consumers aware of their actual credit score so that they can fully understand how it may affect their qualification for a particular loan or the interest rate they may receive on a loan for which they do qualify.
- Help consumers stay abreast of the activity that is affecting their credit report, thereby alerting them early to the possibility of identity theft. As the Internet continues to grow in popularity, identity theft is on the rise as well, as consumers are more vulnerable in a variety of situations to thieves stealing their personal information. If their identity is stolen and used to procure lines of credit, consumers will see such activity on a free credit report. This is absolutely crucial as identity theft can easily damage a consumer’s credit for many years following the incident. By staying on top of their information through a free credit report consumers are able to stay proactive in addressing their financial health.
Addressing Errors on a Free Credit Report
Clearly the most important reason for a consumer requesting a free credit report is to ensure that everything is as it should be; if you are someone who pays their bills on time and is invested in maintaining a desirable credit score, there is merit in ensuring that the credit score is not affected by erroneous information. Even for those who are not overly concerned about their credit score would be wise to check their free credit report on a frequent basis. They may be unaware that there is false information that has been affecting their credit score – and their ability to qualify for loans and low interest rates – for years.
If, after receiving a free credit report, a consumer determines that there are mistakes on the report, it is important to address the issue immediately with the credit bureau that is reporting the information. The consumer should address – in writing – the specific issue they have with the information provided. In turn, once they receive the written request, the credit bureau will then have the opportunity to investigate the claim. In order to do this they will contact the entity that has provided the information – the credit card company, the mortgage company, etc. – and request that they investigate the possible inaccuracy on their end. If it is found that there is, in fact, an inaccuracy, the company that has provided the inaccurate information must alert all three credit bureaus so that the consumer’s file can be fixed. The consumer should then be issued another free credit report so that they can ensure that the information has been rectified and the report is now accurate.
A credit report can save consumers significant headaches as they navigate their own world of personal finance. By staying on top of what their credit score says about them, consumers can take control of their financial future. If necessary,consumers can repair their credit is through a number of methods including use of secured credit cards.