Why is Your Credit Report Important?

With the recent breach at major retailers around the holiday, not only checking you bank statement and monthly credit card statement are important, but so is your credit report.

If you are turned down for a loan or a credit card due to a bad credit history, you can obtain a copy of your credit report to see why.  The company who denies your credit should convey which reporting agency they used for obtaining your credit report.  But being proactive and obtaining your three reports annually will keep being denied credit from happening.

There are many television commercials and web sites that claim to offer you access to these credit reports.  Before ordering, make sure you do not have to pay anything, as most offer a "free" trial period that will quickly expire and then require a monthly credit card fee to monitor your credit history.  By reading the fine print if signing up on a website or with a credit monitoring website, you will know if there are fees to access your credit report and how often you can access it.

In December 2003, the FAST Act (Fair and Accurate Credit Transactions Act) was passed by Congress, allowing you to annually obtain through one convenient source, a free copy of your credit file from the three major credit reporting agencies.  Your TransUnion®, Experian®, and Equifax® reports are available through one place once every 12 months.

Look for the legitimate website at www.AnnualCreditReport.com.   If you do not feel comfortable  ordering online, there are two other options for obtaining your free credit reports.  By telephone at 877-FACTACT or by writing to request a form from Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.

All three options will require you to give your name, address, Social Security Number, and birth date.  You will also be required to provide additional information that verifies the agency is communicating with you, and not someone attempting to imitate you.  To prove your identity, you will be required to prove a bill such as your monthly mortgage payment amount or another major reoccurring bill.

Some of the reasons why you should obtain copies for all three companies.

1.  To stay on top of your credit history, obtaining more than one report is necessary.  Different companies report your transactions to the different agencies.  When you apply for credit (borrowing money to purchase a car or home, or opening a credit card, and even applying for a job) the company may only check one of these three sources.  That's why checking all three is so important.

2.  When you are delinquent account is caught up or an account is paid off, it may not be reported the each of the agencies in a timely fashion, allowing it to remain on your report.   If you find anything that is inaccurate on your credit report, you can file an appeal with the agency.  They must investigate with the company in question and update your report based upon their findings.

For additional information about your credit report, check out this government website:  http://www.consumer.ftc.gov/articles/0155-free-credit-reports.

Next month, you can learn more about the importance of your credit score.