Credit Reports: How to Get them and Why

2007-03-08 10:33:40

( Financial )



What Are Credit Reports?

Credit reports keep track of your credit activities. They contain your identifying information such as your name, present and previous addresses, social security number and date of birth; as well as information about your bank accounts, credit card accounts and other loans. It can also contain bankruptcy and judgment records. The information in your credit reports comes from your creditors as compiled by credit bureaus. Credit reports are used to evaluate your applications for loans, employment and even insurance.

How To Obtain A Credit Report

All American consumers are entitled to a free copy of their credit report from each of the three nationwide credit bureaus every 12 months. To get yours, go to www.annualcreditreport.com and make a request. Take note that this website is the only authorized source for free online copies of credit reports. Contacting the three credit bureaus isn’t necessary unless you want to make a request for additional copies which you have to pay for. After obtaining your copy, check for errors such as misspellings, wrong addresses and accounts that don’t belong to you and have them corrected.

What is a FICO score report?

Your credit report can just as well be called a FICO score report because they are the basis for calculating your FICO scores which is used by lenders to determine the risk of lending you money. You have 3 FICO scores, one each from the three nationwide credit bureaus. FICO scores may differ from one bureau to another. For example, your FICO score on your Experian report may be higher or lower than those from the other two bureaus. This all depends on the information that the credit bureaus have about you. In any case, you need to aspire for your FICO scores to be as high as possible since they will ultimately affect your chances of qualifying for great rates from lenders. The best way to get a good FICO score is to be responsible with your credit behavior. Delinquencies in payments and excessive credit card debt will lower your FICO score faster than you can imagine.

Why Are Credit Reports Important?

They matter to you because they provide your creditors information about your credit worthiness. Knowing what is in your credit report is important if you are planning to get a mortgage or some other form of financing. But whether you’re applying for a loan or not, monitoring your credit report has become increasingly necessary because of increasing incidence of identity theft. Criminals might take over your identity and destroy your credit reputation without your knowledge. Your best protection is of course being aware of the danger so check on your credit report today!


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