How to obtain a copy of your individual free credit report
Credit reports contain information about an individual's financial background including loan history, credit card accounts,
employment history, and legal situations. They provide the information that lenders use to determine the viability
of providing or loaning money to people. This includes all types of loans, including mortgages, home equity, auto,
and home equity lines of credit or HELOC.
Important facts included in an individual's credit report can influence the interest rate and terms that are offered
with specific loans. Additionally, this information can impact the amount of the loan or money that they will
be approved to borrow. The information included on credit reports can eliminate the possibility of obtaining any type
of loan at all.
Each credit report, also known as a credit history, includes a credit score that reflects the type of credit a
person has. The higher the credit score is, the better the individual's credit rating. Likewise, the higher the
credit score is, the better the individual's chances for obtaining a loan or new credit card account.
Credit reports are compiled by agencies known as credit bureaus. Each credit bureau has its own formula for calculating
a person's score. Therefore, the scores vary from one credit bureau to another.
Through the FCRA or Fair Credit Reporting Act, consumers may apply for one free copy of their individual credit report
from each one of the three major credit bureaus once every year. These three bureaus, Trans Union, Experian, and Equifax,
operate throughout the country.
Consumers can visit the website at annualcreditreport.com in order to apply for their free credit report.
Additionally, various other credit bureaus will provide a copy for a small fee. Moreover, it is possible
to use a credit monitoring service that will provide a copy of the report in addition
to monitoring the activity on your credit accounts.
How to read your credit report
If you have ever tried to read your credit report, you know they can be many pages long and hard to follow.
Regardless, understanding your credit report will make it easier for you to manage your debt and keep
track of your various accounts, so learning how to read them is essential.
All major credit-reporting agencies organize their reports into six basic sections that are easy to follow
if you understand their purpose. Below are descriptions of the six major sections you are likely to see on your credit report.
Personal Information - Here you will find your name, address, date of birth and Social Security Number (SSN).
Also listed will be any other names that have ever been associated with your SSN.
It is very important that you verify the information in this section.
Incorrect information could drastically hurt your credit, and may even indicate identity theft or other fraudulent activity.
Public Information - This section will list any judgments that have been made against you in a court of law.
Here you would find bankruptcy, liens, evictions, garnishments, and other orders made by the court for you to pay a creditor.
Credit Summary - Most credit reports include a summary that will shows the number of accounts you have,
the total amount of credit available to you and how much of that credit you have used.
This is a good place to look if you want an estimate of your debt to credit ratio.
Account History - This section usually makes up about 80% of your credit report.
Here you will find detailed information about each account, including when it was opened and if it is in good standing.
Most reports will show if you paid your bill to that creditor on time each month, going back two years.
When applying for new credit, the information contained in this section will be used to determine your credit-worthiness.
Inquiries - Whenever you apply for credit, the creditor will request your report and that request will show here.
It is a good idea to keep the number of inquiries to a minimum, as a high number of them indicate a person
with a high credit risk. The good news is that inquiries "fall off" your credit report after two years.
Requesting your own credit report is not reflected as an inquiry.
Creditor Information - For disputes on any of your accounts, you should refer to this section.
Here you will find detailed contact information for each of your creditors, including address
and phone number, and sometimes website information and a customer service email address.