A Free credit report like paid credit report contains information regarding your credit history. This data is collected by a credit reporting agency. These credit reporting agencies then sell this information to credit providers like banks and lending institutions and of course the credit card companies.
Your Credit report consists of following components. although formatting is done by each credit reporting agency differently.
1. Your Present and Past Addresses
2. Total outstanding debts
3. Record of payments (e.g regular, late, missed, collection etc.)
4. Public record information like liens or court judgment and decrees against you
5. Your Employer’s name and address
6. General data like your social security number, marital status, age group etc..
7. Importance of Credit Report
It is a wise thing to keep track of your credit history. Checking your credit report every six months will keep you updated on your financial standing as well as It will give you a lender’s perspective of your credit worthiness. It is also a good way to stay informed on how your credit transactions have been recorded by credit report providing agencies. A typical credit report will also cover one of the following areas:
Credit Fraud happens all the time. Its when some one uses your credit card to go on a spending spree. US Laws protect from transactions made on a stolen card. You maximum liability on such transactions never exceed $50. These kind of unusual credit activities might red flag your credit report for some of the lenders.
Identity theft is quite common these days. It happens when some one takes your social security number or account numbers and other personal information and starts opening accounts and spending money. Its a crime and very frequently it happens. Checking your credit report early and regularly helps you detect and prevent such liabilities as a credit report lists all applications for credit and credit card that were approved or rejected by lenders.
Credit Reports Request:
Each time you apply for a credit card or a loan, your potential lender requests for your credit report from one of the credit reporting agencies. This request for credit report is also noted in your credit history. If you apply at too many places and too frequently in a short period of time, It is not good for your credit worthiness and clearly shows that you are desperate for money and thus a credit risk. A regular check of your credit report makes sure that all such inquiries have been made on your own request and no un-authorized access to your credit information is happening. If you identify any such case. the inquirer has broken a law and you can sue them for good.
To err is human. Even the use of computers has not eliminated the errors from being made. Data Entry can be faulty and often someone else information can be posted to your account. This can also mean that the payments you have already made might not be recorded in your report. Checking credit report and comparing it against your own records help you point out inconsistencies in credit reporting agency’s credit records.
You have been mailing your checks regularly. but the main delivery system can be faulty. This can cause repeated late payments or even missed payments appear on your record. All this can lower your credit score and make you a bad credit prospect. Check your credit report to make sure all such payments are accounted for in your report.
About Credit Reporting Agencies:
There are 3 large credit reporting agencies. Equifax, Experian and Trans Union. All of them charge different fees for a credit report. While they all are doing almost the same stuff, Their reports are not always same. Each company has its own formula to calculate your credit rating. aka. Credit Score.
They will always provide you the Credit Score but will never share with you the method by which they arrived at that particular number. So It is a good idea to check your credit report from all three agencies. Following are their addresses and contact information.
Free Credit Report
Do you know that you are entitled by law to get a free credit report for all the agencies once in a given period? (usually an year). So before you spend any money on getting a single or merged credit report (from all three credit rating agencies) Check out if you qualify for a free credit report. According to a Lawyer you are entitled to get one free credit report each year if you fall in one of these categories.
– You are entitled by law to get one free credit report each year If you are a resident of one of the following states
6.Georgia In Georgia, you can request two free credit reports. (Lucky Georgians)
– If you are denied of credit card or loan by any institution and they based such decision on report of one of the credit reporting agencies, you may request a free copy of your credit report from that credit reporting agency. but you got to act within 60 days of such refusal.
– You are entitled to a free credit report if you are unemployed and looking for work.
– You are also entitled to get free credit report if you receiving social assistance or welfare.
– Victim of frauds are also entitled to get free credit report.
Please leave a comment if you have any questions or comments. Have a nice day!