Free Credit Reports
In this day and age it seems as if most of what is known about us can be found on a computer somewhere; and the fact is that it’s true. Anytime anyone wants pertinent information regarding our background, employment record, and credit history all the information that they seek is never more than a few clicks away.
When it comes to credit especially there exists a significant amount of information regarding our history when it comes to paying bills, the loans that have been extended to us, and even those creditors that have checked into our credit previously. While paying a bill late may have been a phase that lasted only a few short months – due in part to a loss of wages or other financial stress – the repercussions of such late payments can very well last for years on our credit report.
For this reasons, and many others, it is absolutely imperative that consumers stay abreast of what is happening on their credit report; and that can be done by requesting free credit reports when appropriate.
What are credit reports?
A credit report is simply information regarding the credit history and credit score of a consumer. If you have credit – or have had credit – you have a credit report. It details your credit history with regard to specific lenders with which you have had lines of credit, your payment history in terms of on-time or late payments, any default of loans, and bankruptcies. Through the culmination of all this information each consumer is assigned a credit score – a number that essentially tells lenders who are investigating a consumer’s creditworthiness the likelihood that the consumer will pay their bills on time and meet the expectations of the loan.
Lenders who are considering an applicant for a line of credit – be it a credit card, a mortgage loan, a car loan, and the like – will pull that applicant’s credit report to assess the risk of lending the applicant money. Some employers will even check a job applicant’s credit report, especially if it is a job position that includes working with finances. Additionally, there are employees for whom a credit report tells a significant amount about the applicant’s personal character – regardless of whether that may be true or not.
The information on credit reports is compiled and kept accurate by three credit bureaus - Equifax, Experian, and TransUnion – to which lenders and employers turn to in order to get free credit reports on their applicants. But consumers can also turn to these credit bureaus when they wish to have their own free credit reports.
What are free credit reports?
Because of the importance of the information contained on credit reports, and the impact said information can have on a consumer’s financial future, it is allowed – and highly recommended – that consumers have access to the information on their report. Free credit reports are a privilege afforded consumers by the Fair Credit Reporting Act as passed by the Federal Trade Commission. Once within every twelve month period consumers can have free credit reports that will allow them to educate themselves on the state of their credit score.
In order to obtain free credit reports consumers can visit a secure site that is a central gatekeeper for all three of the credit bureaus. There, the consumer can request free credit reports from all three of the bureaus – or just one in particular depending on their needs. The site will ask for pertinent personal information and once that is validated they will send the consumer their free credit reports by mail within fifteen days. Consumers are requested not to contact the individual credit bureaus directly but rather to work through this central site.
Additionally, if a consumer is turned down for credit for any reason they may be able to – depending on the state in which they live – request free credit reports so they can better understand the reasons for the denial of credit.
Still other consumers who are working with debt consolidation and other financial services in an effort to get back on financial track may be able to request free credit reports in pursuit of this effort.
The importance of free credit reports
These help the consumer in innumerable ways. For one, it allows them to fully understand their credit score and how certain decisions have subsequently impacted that score. Further, these arm consumers with important information that will help them determine the kinds of loans for which they will best qualify and what they can expect in terms of interest rates that will be offered to them.
Additionally, these reports offer consumers an opportunity to take responsibility for their financial footprint and make decisions that will better impact their credit score. By making financial strides and taking responsible action, consumers can see firsthand through their free credit reports just how much of a positive impact their commitment can make on their credit score.
Conversely, free credit reports also exist so that consumers can ensure that there is no erroneous information contained in their credit history and impacting their credit score. If the consumer sees information with which they do not agree they can immediately contact the credit bureau – in writing – to ask that the information be investigated. It is incumbent upon the credit bureau at this point to seek verification from the creditor that provided the information to ensure that it is indeed accurate. If it is determined that there are inaccuracies the information must be removed – through a written request provided by the creditor. The consumer can then ensure that going forward this information has been removed or changed by continuing to read and follow their reports.
Getting these reports can make all the difference for consumers as they navigate their finances. We are not just a number. But there is a number that can greatly impact our ability to live comfortably and have the freedom to make our own financial choices. In order to make sure that this number accurately reflects who we are it is important to stay on top of the information through free credit reports.