Why Getting Your Free Credit Report is So Important


Recently, the government passed a law that requires all three major credit reporting agencies to provide you with a free credit report. While many people have yet to take advantage of this, it is actually something that everyone should do every single year. While it is unfortunate, the truth is that many people have inaccurate items on their credit report that can greatly decrease their credit score, costing them thousands in interest and reducing their ability to obtain loans and even to get jobs and rental housing.

Because of the frequency of inaccurate reports, all people should obtain their free credit report every single year. Take the time to go over the report fully, and take note of any items that you dispute. If there is an inaccurate or invalid item on your credit report, you have the legal right to dispute the item, demanding that the debt be proved or that in the absence of proof it be immediately removed from the report. This will help ensure that your credit report only contains valid items and that you are not penalized for debts and delinquencies that do not belong to you.

When you get your free credit report, look at every single item. You will want to look for not only invalid debts, but the dates that your valid debts will be removed from your report. Understand that a negative item stays on your credit report for seven years after it first becomes delinquent, and ensure that no debts older than this are present on your report. While your creditors are free to sell your debt to other collections agencies, you should also be aware that the date is not allowed to change. No matter how many times your debt changes hands, it must be completely removed from your free credit report exactly seven years after the first delinquency.

Credit collections agencies often list the date an item will be removed from your credit report at seven years from the date they purchase the debt. This is an underhanded move that can easily be disputed and fixed, but because many consumers do not check their reports or understand the laws, companies often get away with it. Check your report carefully. If you dispute the date of removal for a particular debt, send the company a message in writing demanding proof of the date's validity. If they are unable to prove the date, the item must be removed from your account.

Your free credit report can be a valuable tool. Knowing exactly what to look for and how to remove inaccurate items can prove highly beneficial. If you find yourself with a number of disputed items or simply do not know how to handle these disputes, there are companies and agencies that are devoted solely to helping people repair their credit. A credit repair company can often help you have your credit report fixed quickly and easily.

Another reason that it is very important to receive and check your free credit report every year is to help you understand your debt situation. If you have a large amount of outstanding debt and are considering bankruptcy or are paying more than you can afford to try to repay the debts, you may want to consider debt consolidation. Debt consolidation rolls all of your debts into a single loan, allowing you to pay off the debts and make only a loan payment.

Other debt consolidation companies strike deals with your creditors, setting up payment schedules. You make a single payment to the consolidation company each month, and they will in turn pay each of your creditors a specified amount. These options will turn those accounts into current status rather than delinquent, allowing you to repair your credit quickly as long as you make timely payments every time they are due.

Obtaining your free credit report offers you a number of advantages. Once you know how to read your report, you will likely find it much easier to determine how to pay off your debts and what steps to take to repair your credit. In this day and age, a high credit score is almost a necessity, and it can certainly offer a number of benefits if you ever find yourself in a tough financial situation. You credit score is the main factor examined when you apply for a loan, a credit card, a mortgage, or even a large number of jobs and rental properties.

Your free credit report is provided as a service to you. The government knows how important it is for people to ensure fair and accurate reporting, which is why the reports are available to everyone. If you find yourself being turned down for loans and want to know why and how to stop it, your first step should always be to examine your credit report.