How and Why to Get a Free Credit Report


There are numerous sources online and offline where one may get a free credit report. These reports, if they are of the commercially-available variety, most often represent an average score reckoned by the separate scores given to every credit-user by the credit scoring agencies. Any report gleaned from one of the three major credit reporting agencies will represent that specific agency's data and no other. These reports offer great insight into a consumer, though they are not universally believed to be such a good measure of creditworthiness as is often claimed.

A free credit report consists of two principal parts: The borrower's credit score and a listing of their various debts over the years. Credit reports will also detail any Chapter 7 or 13 bankruptcies the individual has suffered and these will have an obviously negative effect on their overall scores. It's important for consumers to understand their rights and their need to keep apprised of what these reports say about them. As there is little accountability in this system, it falls upon the consumer to stand up for themselves and to make certain they are fairly represented.

Any debt or bankruptcy that has been settled more than 10 years past should not appear on a credit report. Oftentimes, collection agencies will try to resurrect debts that are still on the report but that are exempt from being collected unless the consumer validates the debt by making a payment. Having a free credit report in one's hands can help combat these predatory agencies and prevent them from making profits off of the hard work of individuals who owe them nothing. It can also empower consumers in other ways, most of which are very easy to realize but seldom exploited.

Looking back over one's free credit report, one will quickly become aware that every negative seems to have a much more significant impact than any of the positives. A credit rating of 700, the brass ring of credit reports, is almost unattainable by anyone who really needs credit from time to time. Therefore, the credit system ends up being doled out in limited doses to those who need it most and, usually, those doses come with the worst possible terms. This is clearly illustrated in the way credit card companies destroy borrower's ratings without offering any real level of service from the start.

Other types of lending are not detailed on free credit reports but have been in use, successfully, for a much longer period of time than have credit reports or credit reporting. This type of lending is based on good-faith and, for larger sums, on collateral being offered to the lender as a means for them to secure the loan. This form of lending tends to have a more above-the-board feel than does credit system based lending, especially when the majority of that system is a mystery to the consumers who are forced to borrow and pay according to its dictates.

A free credit report will not contain records of and will not be used by creditors who offer payday and auto title loans. Payday loans are of the good-faith type of lending. The consumer offers information about their income and their pay periods and sets up a short-term loan which is paid back on their next payday. Because the lender receives verifiable information, they can make the loan based on concrete data regarding income and be assured the borrower will have the funds to repay the loan on their next payday. No credit check required and no credit check made.

A free credit report will also not detail any auto title loans. This type of lending is based on the consumer offering something of value as assurance that they will pay back the loan on the agreed-upon terms. This arrangement is as ancient as is lending and is one of the most easy-to-understand types of lending on the market. It has endured because it allows people to take sensible financial risks and because it has a quality of dissuading people from making unwise borrowing decisions. Regulations that apply to these loans also offer this sort of dissuasion to the borrower; a valuable feature.

When one looks over their free credit report, they should take the time to ask themselves if it actually portrays them in an accurate way and if the emotional costs of dealing within the system are worth the benefits. There are other ways to get by and there are other ways to get credit. Oftentimes, between saving money and using lenders who operate on straightforward terms with sensible limits, consumers will find that their world becomes much less stressful and more easy to understand and manage. Payday and auto title lenders provide a good starting point toward this goal.