What is a Credit Report? And How do I Get one?

It seems like every day there is news of a company losing millions of people’s personal information and compromising the security of their credit. Hackers can use personal information to take out loans in your name and ruin your credit. The conventional wisdom is to check your credit report often to protect your identity, but what is a credit report?

A credit report refers to an inclusive document of financial history for an individual. Credit and loan information, such as the balance and monthly payment history, are compiled for creditors to look at an individual and see how good or bad their overall credit is. Although married couples can take out loans together, such as mortgages, each person will have his or her own credit history in his or her own credit report.

Although many refer to it as just a “credit report”, there are actually three major companies that all have their own reports. Equifax, Experian, and TransUnion each produce their own credit reports for each individual with credit. There is an arrangement as outlined in the Fair Credit Reporting Act (FCRA) with the Federal Government for each of these companies to provide each individual with one free copy of their report every 12 months. It is a good practice to get these free reports every 12 months (at the same time or spaced out over the year), so you can monitor your credit and fix any potential mistakes or report any fraudulent activity.

To obtain your free copies, annualcreditreport.com is a website authorized by federal law. Annualcreditreport.com will walk you through the steps of obtaining your credit reports. Other sites may claim to have free credit reports, but they can have hidden fee structures – use caution when using other sites that claim to be free. The advice my father gave me when I graduated high school was, “If they ask for credit card information, it probably isn’t free for long.” This advice can be applicable to the hundreds of sites offering “free” credit reports.

Written by dvdscttbckr on Thursday October 29, 2015
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