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Credit Reports & Credit Scores Living a Better Life Credit Scores and Free Credit Reports It's a good idea to check your credit report for accuracy every year, but especially before seeking a new loan! Reporting errors are very common and can be quite embarrassing if not corrected beforehand. Just one small error on your report can bring your Credit Score down, and that's the information your loan company will be using to decide your interest rate. First, let me explain how credit scores work and then I will tell you all about credit reports and how you can get yours completely FREE every year and hopefully fix errors that might be on your report--on your own!
What is a Credit Score? Your Credit Score (also known as a Beacon Score, Emperica Score, or Fico Score - from Fair, Isaac and Company), is essentially an estimate of your credit value to lenders. In other words, it is the information lenders use to determine your credit and interest rates. The Credit Score is based on your personal credit history and can change easily, for better or worse. What Affects MY Credit Score? Here are some things that will affect your Credit Score... Positive
Negative
* When a consumer asks for his/her own Credit Report, it does not hurt the Credit Score. Why Does MY Credit Score Matter? Obviously, the better your Credit Score the better credit (and interest rates) you will receive when seeking a new loan. But that's not all. It's important to keep your credit in good shape and make sure there are no errors on your report, even if you don't need a new loan right now. You see, banks and credit companies are not the only ones looking at your Credit Score. In addition to all lending institutions, your Credit Score may be taken into consideration by current and future employers, insurance companies and even rental landlords. What ARE the Numbers? Credit Scores have a wide range, 300 to 850, but the following levels are the most common. In order to get the best interest rate on a new loan you'll need to be in the top 2 levels, and preferably the top... 850-720 How Do I Get a FREE Copy of My Credit Report? You can get a free copy of your credit report every year at AnnualCreditReport.com. This is the ONLY free place to get your credit report with no strings attached! There are many other companies and web sites with similar names so be careful! This company has been established by the three major Credit Bureaus in accordance with the guidelines of the FCRA from the U.S. Government... which means that we all now have access to our credit reports on an annual basis, for FREE! TIP: You can order your credit report once a year from each of the three Credit Bureaus every 12 months, or your can order them throughout the year at different times, ONE at a time! "The Fair Credit Reporting Act (FCRA) requires each of the nationwide consumer reporting companies — Equifax, Experian, and TransUnion — to provide you with a free copy of your credit report, at your request, once every 12 months. The FCRA promotes the accuracy and privacy of information in the files of the nation’s consumer reporting companies. The Federal Trade Commission (FTC), the nation’s consumer protection agency, enforces the FCRA with respect to consumer reporting companies. A credit report includes information on where you live, how you pay your bills, and whether you’ve been sued or arrested, or have filed for bankruptcy. Nationwide consumer reporting companies sell the information in your report to creditors, insurers, employers, and other businesses that use it to evaluate your applications for credit, insurance, employment, or renting a home." - FTC.gov Equifax is considered the main Credit Bureau and most widely used by loan companies, but it's also a good idea to get your report from all three companies because they may include different information - as they do not report to each other. Also, if you're married, each spouse should order a copy of their own report - if there is a mistake on one spouse's report it is likely to be on both. Free Annual Credit Reports (This Annual Credit Report company is sponsored by the three major Credit Bureaus... Equifax, Experian and TransUnion. If you have already ordered a credit report in the last 12 months and would like to order a new one, you can contact the credit bureaus directly.) The Three Main Credit Bureaus if You Wish to Contact Them Also... Equifax Experian TransUnion How Do I Correct ERRORS on My Credit Report? Please keep in mind, Credit Bureaus are simply recording agencies who are paid by those seeking your credit report. Federal laws have been put in place to protect you, the consumer, and they are very much in your favor. In other words, they do not have legal powers over you and are usually very easy to work with. It's just a matter of taking the time to make sure your information is being recorded correctly, and not doing so can be very costly. After receiving your credit report, sit down with some good lighting and review it thoroughly. It can be a bit tedious to check your report thoroughly, especially since they include information going back 7-10 years, but it's well worth your time. If you find any errors on your credit report that need to be corrected (or old accounts you would like to be removed - which they may or may not do), simply fill out the information on the correction pages included and mail them back. You will also have the opportunity to update your employment information. In a few weeks you should receive an updated copy of your credit report, along with an explanation of any changes they made. And rest assured, if there is a true error on your credit report, they will remove it promptly! If for any reason they do not correct the error, send them a second more detailed letter explaining in full why it should be removed - that should get it done!
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Please Use Caution When Seeking Your FREE Credit Reports! There are many companies out there who are trying to get your business and sign you up for services you do not need. Equifax and Fico are companies that we trust if you are interested in any type of "credit watch" service, but again, to get your FREE CREDIT REPORTS EACH YEAR just go to AnnualCreditReport.com with no strings attached. There will be many other web sites with similar names that are NOT the same free company organized by the three main Credit Bureaus in accordance with the FCRA (Fair Credit Reporting Act)! You can also contact the Credit Bureaus as we've listed above and order your reports directly from them for a minimal fee (about $10.00) if you need more than one report during the year, from one or more of the Bureaus.
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Copyright © 2004-2012 by Michelle Jones. All rights reserved. Want more money-saving resources and tips? Get a FREE Subscription to our monthly newsletter! Editor's Note: We try our best to keep this page up to date with current credit report information, if you have information we need to update please contact us.
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