Why You Need Your Free Credit Report


Few things are as important to the modern consumer as their credit. However, despite that importance, or perhaps because of it, credit can be very easy to damage. A single unpaid bill is all it takes to wipe out years of hard work. Sometimes, the damage to your credit report isn't even your fault. For instance, identity theft is a rampant crime in today's world; it takes almost nothing to locate someone's Social Security number and other vital information and simply assume their identity. Of course, errors by the credit bureau can also cause problems ? a free credit report can help ensure that you do not have to deal with the problem of bad credit.

Why do you need a free credit report? Where can you find one? What information is included in this document? First, you will actually find that you are entitled to three credit reports each year ? federal law states that each of the three major credit bureaus must provide you with one each year. These bureaus are Equifax, TransUnion and Experian. However, you will also be entitled to a free credit report any time you have been turned down for credit or even if you have been turned down for a job because of the information on your credit report.
Your free credit report contains a considerable amount of information about you and your debts. Companies from lenders to potential employers use this information to determine if you are a worthwhile credit risk, or if they would do better to avoid you altogether. You'll find information about legal judgments, about delinquent debts, about bankruptcy filings, divorce, back taxes and much more. In short, these reports are summaries of your life in financial terms, though you'll find some items that might seem as though they have no bearing on your financial life.

To apply for a free credit report, you have several options. First, you can use the website, AnnualCreditReport.com (the only source online for a truly free report). This gives you access to all three credit bureaus, as well as instructions about how to apply for your report. You can also call each credit bureau and request that they send you your copy. Finally, you can send a letter the credit bureau, requesting that they mail you a copy of your credit report. Obviously, the online option is the fastest and simplest way to go about obtaining a copy of your credit reports.

Do you truly need all three copies available to you? It is highly advised that you get a copy from each credit bureau. Each of the three credit bureaus can have different items on file about you and some might have inaccurate items that are not reported by the others. Obtaining all three reports is the only way to ensure that you have the accurate information you need to keep an eye on your credit score. What do you do once you have your reports?

Of course, the first thing to do is to look over the report and ensure that all items are accurate and legitimate. Credit bureaus do make mistakes ? problems can occur with similar names, similar Social Security numbers and erroneously reported debts. Take a look at the items listed and make sure that you incurred each item on the page. If you find items that should not be there, you will need to write a letter to the credit bureau, include proof that the item should not be included in your report and dispute the item. However, items that are accurate cannot be disputed in this manner. There is no way to remove accurate information from your credit report, other than paying the debt.

Why do you need to watch your credit by getting a free credit report each year? One of the most important reasons is to safeguard against identity theft. It is all too easy to steal someone's Social Security number, their name, their address and assume their identity. Thousands of consumers each year find that their identity has been stolen. Besides being an invasion of privacy, this can reduce your buying power and lower your credit score. It can also take years to have the erroneous information removed from your credit report.

By obtaining a copy of your free credit report from each of the three major credit bureaus every year, you can ensure that you are not victimized by criminals. You can also ensure that any errors on the part of the credit bureaus are removed immediately. This is the only way that a consumer can ensure they have the credit score they need to have access to the financial tools that are required to enjoy life. With good credit, you can do almost anything. However, if you do not watch your credit report, you can find your credit is less than it should be.