Secrets of a Free Credit Report


While everyone should obtain an annual, free credit report to find mistakes or simply keep good credit in good standing, people need to understand some important factors behind the credit report. The better a person understands what a report and credit history is and how it works the easier it would be to bring bad credit to a good number and keep good credit in order.

For starters, people living in the United States are entitled to one free credit report every year under the federal Fair Credit Reporting Act, also known as FCRA. The purpose of this government ruling is so people can stay informed of what is happening on the report, which then gives them the opportunity to identify errors and request changes, as well as have protection against identity theft.

For a long time, people were not given the option of obtaining a free credit report, meaning they had to pay around $20 a piece, one from each of the three credit bureaus including TransUnion, Equifax, and Experian. While a few states created a system whereby a person could get a copy of a free credit report, most did not provide this offer. Because there are so many dynamics of the report that can help or hurt a person in applying for a loan, everyone should take advantage of the annual, free credit report.

In addition to a person contacting each of the credit bureaus individually by mail, phone, or website to get a copy of the free credit report, individuals can also purchase what is known as a three-in-one report. This report does cost a little money but instead of someone getting three separate copies, one report would be provided containing information from all three reporting agencies.

However, people have another opportunity for getting a copy of the free credit report is by using a newly created website supported by the three bureaus, which is found by visiting AnnualCreditReport.com or by calling 877-322-8228. Realizing the need to make it easier for people to get a copy of the free credit report, the three credit bureaus decided to team, resulting in a simple system.

For an individual to obtain a copy of the free credit report, certain information needs to be provided regardless of the route taken for obtaining copies. This would include the consumer?s name, current address, Social Security number, and date of birth. Additionally, if the person has lived in the current residence for less than two years, one or two previous addresses would also be provided. In some cases, a credit bureau sending out the free credit report may or may not ask for one piece of information that only the consumer would know, as a safety measure.
The new law in which every person in America can obtain a copy of his or her free credit report was established on September 1, 2005. What this means is that when visiting the website, AnnualCreditReport.com and providing all required information/documentation, the report is available instantly online. Now, if an individual chooses to call the toll-free number, the report would also be provided but via hardcopy, taking about 15 to 20 days to receive.

With the free credit report, people have the chance to look for anything being reported inaccurately so changes could be made. Obviously, since the FICO score on the report serves as a person?s financial reputation to creditors, having problems resolved is critical. The information on the report is quite extensive and detailed so going through each line item will take a little bit of time and patience but the outcome could be highly beneficial.

Whenever someone goes to a bank or some other financial institution to apply for a loan, perhaps for a car or home, the first thing the creditor would do is pull a copy of that person?s credit report. The information shown and the FICO score helps the lender determine if that individual is a risk or someone that could handle a loan responsibly. However, before applying for a loan or credit card, or even a job, a person should have a clear understanding of his or her credit standing, which can be done by reviewing the free credit report.

Another secret to a free credit report is that information from the reports comes from a variety of resources. In addition to payment history, balances, and type of loan being reported by lending and credit card companies, the report also has information from public records. This means if a person has a history of bankruptcy, liens, or judgments, it would be reported as well. All of the information seen on the free credit report is critical, no matter how big or small.

Finally, what people find on the free credit report is regurgitated information among the different credit bureaus although some creditors use only one bureau. Therefore, anyone interested in cleaning up credit or maintaining good credit needs to make sure he or she gets a free credit report from all three reporting agencies, chooses the three-in-one report, or uses the website so that all information is checked.