What Your Free Credit Report Means


A free credit report is a widely-offered product with many online vendors providing almost instant access to this information. The credit report contains information gathered from either one, two or all three of the major credit reporting agencies. The credit system is one where these agencies, who are essentially unaccountable to the consumer, control the financial futures of most people in the job and financial markets. While errors can be fixed, consumers are usually treated as if they're the ones who are mistaken and these companies can be very hesitant to fix their own errors.

The free credit report will likely contain a history of borrowing and payments with any past due or collections accounts clearly noted. There may be a series of "scores" on the report or simply one score that represents the average of the score assigned by each agency listed. This score is relatively simple: 700 is very good credit and anything below 350 means that the consumer is likely eligible for no credit products at all. This number is very easily diminished and only increased with an incredible amount of effort, sometimes only with the assistance of a professional agency.

The free credit report does give the consumer a good idea of where they stand in the eyes of most lenders. This number is largely a replacement for a personal relationship and, oftentimes, for common sense where determining the credit-worthiness of a borrower is concerned. An individual who lost their job and missed a couple of house payments may be represented as nothing more than an irresponsible individual who tried to game the system. There are some credit products which are almost universally-available, however, and offer the same sort of convenience as do credit cards and other revolving sources of credit.

There are certain circumstances in which a consumer has the right to demand a copy of their credit report from all three reporting agencies. These free credit reports will only cover the agencies individually and may not represent exactly what some lenders see as lenders tend to use different services from one to the next. However, it will give a good overview and, hopefully, any errors that happen to be on the credit report will be obvious to the consumer and the consumer can then work quickly to fix such errors that may be costing them money.

If one has applied for, and been denied, any form of credit, they have a right to see their credit report. This is in keeping with the requirements of a federal law and doesn't vary by state. If one is turned down, they're always entitled to see the report that led the creditor to make that determination. One can check online with the reporting agencies to get a copy of their credit report from all three. They are generally served online and can be printed out or saved to the computer for record-keeping purposes.

Many individuals, especially those who don't regularly make use of credit, seldom, if ever, bother to check their credit report. While it might seem something of an unnecessary pain to do so for such individuals, getting a free credit report is a good idea whether one chooses to participate in the credit system or not. It's always good to know how one is rated by these agencies and, to that end, a federal law provides that every individual is entitled to a free report from all three agencies once per year, even if that individual has applied for no credit or has not been turned down.

These laws and the free credit report they mandate are an attempt to make these agencies more accountable to the consumer. While they're handy for the consumer, the credit rating agency is still in full control of consumer's credit scores and far too many errors slip into credit reports and are notoriously difficult to get removed once they're in place. Where legislation offers one type of solution, the free market offers entirely another: one may simply choose to do their business with lenders who don't bother with the regular system of credit reporting and who work on a more personal basis.

A free credit report will not detail one's eligibility for payday lending or car title lending. These lenders don't use this system of assessing a customer's worthiness and simply work off of the individual's income or the value of the vehicle that's used as collateral for the loan. This means that any rough spots in one's past need not impact their future as they do with traditional lenders. Payday loans and car title loans are widely available online. When applying for these credit products, it's safe to put the credit report aside and to work from one's present situation, not the past.