How and why should you check your free credit report?

How and why should you check your free credit report

It is essential to have an organized, clean, and excellent financial history! However, that is a Utopian situation for the right amount of people, since financial stress and business loss are inevitable parts of life. Planning your finances is essential so that you have a decent credit history. And that will help you to get a loan for personal or business purposes in moments of a financial crisis.

Also, when you assess your credit report, you can analyze and correct the mistakes. It further helps you to avoid chances of identity theft. The statement that has raw data gets added to the credit information. And any wrong or erroneous data can affect your credit score and report.

Today, you can check your credit report for free. Also, the FCRA (Fair Credit Reporting Act) professes that people should check their credit report for free, annually. Earlier it was complicated to access this report for free. People needed to make purchases and sometimes qualify for the same, which was a tedious process. To know more about this, you can search online with search phrases like, “Free Annual Credit Report – How & Where to Get Yours” and browse through the results.

Ways to get your credit report online for free

Today, you can browse through websites that help you procure free credit reports. You need to key in your details for the website to authenticate your identity before you download the result. You can also refer to the following guidelines:

  • Always time your credit report requests

You can always request for all your credit reports at one go, from three credit bureaus i.e., Equifax, Experian, and TransUnion. However, it’s a wise decision to ask for one report at a given time. When you do this, you can request the credit report from another bureau the next month. And just in case there have been any crucial changes, you can address the same without having to wait for an entire year.

Every credit bureau might have slight variations in the data they provide. However, the differences are minute. For instances, in case of identity theft, the changed data will be available in more than one report. And this is a good sign that you need to get proactive and resolve the issue at hand.

Also Read 5 Legal debt relief programs to save money and credit

  • Get in touch with the credit bureaus directly

You can contact the various credit bureaus all at one go! It all depends on your wish. You can place a request for your report with no extra charge. At times a minimal cost is applicable, according to the FCRA which has mandated that the credit reports are available for free when you use a specific phone number and website. Several organizations sell paid reports and subscription services. If you want a free report, chances are you wouldn’t be contacting these companies.

  • The data you require

You need to provide necessary details for procuring the free credit reports. It usually includes the following:

  1. Your name
  2. Home address
  3. Date of birth
  4. Social security number

You might have to verify your earlier addresses. Also, you have to confirm a fact or information that you know already. It is used as a safety step so that there are no online forgeries and identity theft.

  • Other things you should know

However, all these procedures and guidelines only help you get a copy of your free credit report. You can’t source your free credit score and any other added service. When you ask for your credit reports, there are chances websites and vendors might offer you other products for which you will have to pay. You should be aware of this and know whether you must pay for these products or not. You will get to know a great deal about your financial state when you have the credit report alone.

Do you need to get concerned about credit scores?

Financial experts stress the importance of having good credit scores. And keeping track of this is also essential. However, there’s nothing called a government credit score for free. According to federal law, there are free reports and not free credit scores. Usually, the scoring models get developed from the data that’s available in the credit report.

Hence, as you opt-in for the free credit report, you might as well purchase a free credit score from the reporting agency. Make sure that you are sourcing this from a reputable and trustworthy agency that is known for its transparent and ethical practices.

Also Read Steps To Reach Perfect Credit Score

The credit score v/s the credit report

Some people are confused about credit report and score! Often, they don’t know whether they should opt-in for one or both. Simply put, your credit report has vital and raw data. This information contains what the government bodies and lenders report to credit bureaus. And the credit score is the number which sums up all the data present in the report. The report comprises of the following information:

  • The loan amount which you are using currently
  • The loan amount that you’ve used earlier
  • Any relevant public records concerning your credit
  • Any details about late loan repayment

Importance of checking your credit report and score

Other than securing yourself from identity theft and other online forgeries, there are a few crucial reasons to opt-in for free credit reports. If you are planning to start a new business, you might need to draw a business loan. Else, you might need to settle past business bills by getting a new loan. In both situations, it is essential to have a clear credit history so that banks and other financial institutions can provide you the loans at best interest rates.

When you get your free credit report, you get to see where you stand and take the necessary measures to enhance it. And as you try to make your credit reports better, you must check it to see if your initiatives are making a difference.

How frequently should you check your free credit report annually? Ideally, you should check it twice or thrice, to ensure complete accuracy. But if that’s not possible, you must check at least once a year.

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