Free credit report

Free credit reports have never been easier to get. You can still go the traditional route and pay for them, and then wait to get them in the mail. Or now you can get them online instantly and best of all for free. Now you can get access your credit history anytime you want and anywhere you want.

Your credit report list your credit history. They track every single payment you’ve made or haven’t made on things such as credit cards, mortgage payments, car loans etc. When you payments are late or worse if you forget to make any payment on any form of credit it shows up in your credit reports.

This can become a major issue when you are seeking new credit such as getting a new credit card, buying a car or house or even for things such as renting an apartment. By getting your free credit reports, you can make sure that there are no errors and that you will not be denied what is yours. Remember your credit reports can affect major elements of your financial future so it pays to be informed, and accessing your free reports can never affect your credit rating. And, if you do find an error in any of your credit reports we can help you fix-it.

Your credit report largely determines whether you can get loans and how much interest you're going to pay.

In the United States there are three major credit reporting agencies or credit bureaus: TransUnion. Equifax and Experian.

3 credit scores

Whenever a consumer applies for credit such as a mortgage or car loan, lenders look at their credit score to determine their creditworthiness. A credit score is essentially a number that represents how much of a credit risk a consumer poses to a lender. Those with high scores pose a low risk and can get a loan at lower interest rates than those with low scores who may be denied credit or who may get it at a higher interest rate.

Credit reports

Credit reports are based on information relating to an individual's place of residence, place of work, when they pay their bills, credit card loans and repayments and other information related to financial transactions. Credit reports can be accessed for free from the three national credit bureaus; Equifax, TransUnion, and Experian. You can access one free report every year from the bureaus all at once or you can space them out.

FICO scores

FICO scores are so-called because they were introduced into the market from the Fair Isaac Corporation (FICO) which came up with the software. 90% of top lenders use the FICO score to make decisions on who to lend to and who not to lend to. These scores are deduced only from information contained in consumer credit reports from the bureaus. They are arrived at by comparing this information to the patterns seen in past credit scores with the aim of estimating a consumer's future credit risk.

Good or bad?

Base FICO scores range from 300 to 850. High scores represent a lower risk and that's what every consumer should aim for. While the majority use this score to arrive at lending decisions, different lenders have different strategies. This includes the level of risk that they deem acceptable for particular credit products. There is no set cut-off score and lenders consider other factors to arrive at the final situation.

Questioning your credit score

Ideally, your scores from the three credit reference bureaus should be the same. However, this can only be so if you request the reports at the same time. This is because your information keeps changing as you pay off debts, bills and conduct other transactions. If there are errors in the reports, you need to write a report to the bureau concerned and let them know about it. Incorrect information can affect your score negatively so it is important to take action to correct it.

annualcreditreport.com is the website set up by US federal government that will let you get a free credit report every year.

Further reading

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