Americans are extended credit based on the credit scores that are posted. The credit scores represent the likelihood of an individual paying down debts.
Financial institutions and credit card companies use the credit score to determine the potential risk of lending money to an individual. Those with higher credit scores and a history of timely repayment of debt will be more likely to be granted a higher extension of credit.
Three Credit Reporting Companies
There are three major credit reporting companies that keep track of credit histories:
The credit reports from these three agencies can differ.
How To Get A Copy Of Your Credit Report For Free
The Fair and Accurate Credit Transactions Act (“FACT”) provides each United States legal resident with one free copy of his or her credit report annually from each credit reporting agency. This free report will not contain a credit score.
You are allowed to request a second copy of your credit report over a one year span if:
- You are denied credit due to a negative reporting in your credit history
- You are unemployed and currently looking for employment
- You are concerned there are errors in your credit report
- You receive public assistance
- You have been declined employment due to something in your credit history that causes a potential employer to deny you a position
The only place you can obtain a truly free credit report from all three agencies is from www.annualcreditreport.com.
What You Need
When requesting a free credit report you will need to be able to supply information such as your name, address, date of birth and Social Security Number. If you have relocated in the past two years, you will also need to provide your previous address. The credit agency may also ask you random questions about what is on your report, such as how much is your mortgage payment or what was your previous address, in order to positively confirm your identity.
Thoroughly Review Your Credit Report
After you receive and review your report, you will need to make a note of everything that is incorrect or out of date. Search for inaccurate and adverse information.
When you have reviewed your credit report, you can request for incorrect or out of date information to be removed. You will need to list each out of date entry or incorrect statement and tell exactly why it is wrong. Once your request arrives at the credit reporting agency, they have 30 days to respond to your concerns. If you inform the credit agency that you are attempting to obtain a mortgage or car loan, it is possible that they can rush your request. If you are correct, the credit bureau must remove the inaccurate or out of date information.
A free credit report inquiry on a yearly basis can provide you with an accurate analysis of your credit history and help you to maintain good credit.