Do You Know Where You Stand With Your Credit Report?

It’s probably something you don’t think about until you go to get a loan. But by then it could be too late. Getting a handle on your credit report is something you should do now, rather than wait until you really need it.

Your credit report is a window to your finances and how you approach them. It’s not the only window, but it’s an important one when it comes to such things as getting favorable mortgage rates and credit card approvals. Banks and other financial institutions rely on credit reports to help determine a person’s loan eligibility.

So where do you turn to for your credit report? A federal law called the Fair Credit Reporting Act (FCRA) requires each of the nationwide credit reporting companies — Equifax, Experian, and TransUnion — to provide you with a free copy of your credit report, at your request, once every 12 months.

These three companies keep a running record of your credit-related activity. In addition to that, they keep track of other information such as where you have lived, whether you have been sued, how you pay your bills, and whether you pay them on time. The companies sell this information to creditors, employers, insurers, and other businesses, who use it to evaluate your credit worthiness.

Accessing your credit report is fairly easy thanks to FCRA. TransUnion, Experian, and Equifax have a central website – www.annualcreditreport.com – where you can place your order. Or you can call 1-877-322-8228. There is also a request form that you can fill out and mail to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. Click on this link — Annual Credit Report Request Form – to access the document.

Credit reports can be ordered one at a time from each of the companies, or all at the same time.

Any report you receive should be checked for completeness and accuracy. If you find something that’s incorrect, you should report it immediately to the company that provided the report.

Reviewing the information in your report is important for a couple of reasons. For one, you want to make sure the report accurately reflects your credit status before you apply for a loan for a major purchase such as a house or car. And you want to guard yourself against identity theft. For instance, if the report lists credit cards that you don’t have, that’s a red flag that your credit might be compromised by someone pretending to be you.

And be aware of unauthorized websites that claim to offer free credit reports, free credit monitoring, or free credit scores. These sites are not part of the legally mandated free annual credit report program established by the FCRA, and they often deceive consumers with seemingly free offers that end up costing money in the long run.

Coming up next: How to build and/or improve your credit.

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