You probably know by now that your credit report is one of the most important financial documents in your life – the contents of your credit report can determine whether or not you can qualify for a loan, get a job, sign up for a cell phone plan, and more.
The good news is that everyone is entitled to a free credit report from each of the three major credit reporting bureaus through AnnualCreditReport.com each year. But it is important to recognize that you can only receive your credit report for free from AnnualCreditReport.com, not your credit score.
Credit report vs. credit score. Your credit report provides a summary of your financial reliability. It contains a history of how you have made your debt repayments and a variety of identifying information about you. Your credit score is a numerical value calculated through the information contained in your credit report. Employers, lenders and insurance companies use the score as a measure of your “risk”. A higher credit score indicates you are a lower risk and will receive the best interest rates on credit products while a lower credit score indicates you are higher risk. The most widely used credit score is calculated through FICO.
Free Credit Report from AnnualCreditReport.com
Did you know that AnnualCreditReport.com is the only authorized resource for obtaining the free annual report required by the Fair Credit Reporting Act? Many companies offer a free credit report, but often package it with a credit score or credit monitoring program.
Why Should You Review Your Credit Report Each Year?
Everyone should obtain a copy of their credit report at least once each year. You can look for any accounts that you don’t recognize because it is either an error made to your credit report or a sign of potential identity theft. If you find accounts you don’t think are yours or other information which is inaccurate, you can contact the credit reporting agency to dispute errors in your credit report. Because your credit report is used by lenders and employers to determine your level of risk, it’s important to make sure the information it contains is accurate.
How to Get a Free Credit Report
You can easily request a copy of your credit report by phone (1-877-322-8228), mail, or the AnnualCreditReport.com website. The Fair Credit Reporting Act makes it possible for each person to receive one free credit report per year from each of the three major credit reporting companies, Experian, TransUnion and Equifax. You can choose to request all three credit reports at once, or one at a time.
Check Your Credit Quarterly
Instead of ordering all three credit reports at the same time, request one report from each of the credit bureaus every four months. This allows you to check your credit report three times each year, and will help you identify possible sources of identity theft or errors before they cause too much damage.
Avoid Credit Reports From Sources That Charge You a Monthly Fee
Many websites will offer you a credit report in exchange for a monthly fee. They may advertise “free credit report,” or “free credit score,” but once you get the report you’ll see a charge on your credit card each month unless you cancel the credit monitoring service. The sites may offer ongoing credit monitoring for that fee, but you can do the same thing by ordering your credit reports for free every four months from each of the credit bureaus.