Your credit report is the most important and very first document that you need to access when it comes to dealing with a low or bad credit score. It is the exact information that lenders rely on to determine your eligibility for a loan or credit card.
Let’s see what it is, why you must keep a tap on it, and how you can access it for free (and a BONUS) –
What is a credit report? And what information does it contain?
Your credit report is nothing but the history of your past debts, along with notes reported by the lenders. Lenders use it to calculate your credit score about which you must have heard already.
It may include details dating back to 7 or 10 years, and even past that for items like tax liens and bankruptcies.
However, it also has other vital information. Like – your payment history for credit cards, loans, mortgage, etc., your total debt, and the dues that you need to pay in the near and distant future.
Based on your employment, it may or may not include information regarding your earning and spending potential. Though, your income or salary isn’t included directly in your credit report.
So, in short, while your credit score gives a hint of your finances, your credit report allows the lenders to see the whole picture and make informed decisions regarding loan and credit card approvals.
Why you must keep an eye on your annual credit report (even if your credit score isn’t low or bad)
It should be obvious that your credit report is a document of your finances that is prepared by your past lenders. There is this possibility that it includes information that hurts your credit score but should not be there.
Moreover, there may exist fraudulent items – purchases and credit cards that you are not aware of – and transactions that are obvious evidence of identity theft or fraud. Each of which lowers your credit score and the ability to avail credit.
Luckily, there are laws regarding what may and may not be included within your credit report. And the US constitution doesn’t only allow you access to your annual credit report for free – but also the ability to challenge the information on the same and get it removed or changed.
That’s why you must keep an eye on your credit report! So you can challenge any discrepancies and get it removed while there is still time.
How to access your annual credit report for free?
If you were to Google or Bing ‘Free credit report’, you will find multiple websites that advertise free annual credit reports but try to sell you something.
So waste no time on those. And log on to the only domain that is owned by the US Government and the best place to get your free Annual Credit Report.
Just click this link: Annual Credit Report. ( For U.S. citizens only. If you are residing outside U.S. then you can try any other website. Browse Google for such websites.)
Once on the website, choose your state and city, then follow the onscreen instructions. You will need to provide your identification and tax information to prove your identity and access the information.
The web portal is powered by three different agencies that track your transactions. You can utilize each service once in a year – but do not have to use them all at once – so you have three free credit reports available in a given year.
It is also possible to get all three reports at the same time. Just tick each service when prompted on the website.
And now, the bonus:
Due to COVID-19 and to help you maintain your credit score through these tough times, they are providing free weekly credit reports until April of 2021. So you can get way more than three free credit reports in a given financial year.
Go and get yours. Now.