What to do if something is wrong?  Bear in mind, that statistics have shown that many credit reports have some sort of error in them.  You don’t want to get turned down for credit, or even worse, employment, because of erroneous information included in your personal credit report.  So what can you do if you find an error?  The short answer is to make the specific credit reporting agency aware of it, and by law, it is their responsibility to correct it.  That’s right, under the Fair Credit Reporting Act, the burden of responsibility falls squarely on the credit bureau and the company (or person) who reported the disputed information.  You are required to kick start the process though, by filing a dispute with the appropriate credit reporting agency in which the erroneous information is included.  If you only pulled one personal credit report, it is a good idea to pull the other three now to ensure that if you are going to clear one up, you can clear them all up.

What happens next?  Upon notification, the credit reporting agency must launch an investigation within thirty days.  They have the ability to throw out your claims if they determine them to be completely baseless.  If they do not think that though, then they will commence with sending information to the information provider to verify the debt, and the reporting of the debt.  If the information is indeed found to be inaccurate, then the credit reporting agency will send notifications to all three agencies, notifying them of the inaccuracy.  If it turns out to be accurate information, then no changes are made.  In the unlikely event that the dispute cannot be resolved, then you can ask for a letter of dispute to be placed in your file.  Please note that this is informational only, and it does not have an impact on your credit score calculation.

Still not satisfied?  If you have the feeling that the credit bureau just simply declared a draw, and you are not satisfied as to how this will be showing on your personal credit report, then you can press the matter a little.  The next step would be to go after the information providers directly.  We are calling them information providers, but in most cases, we are referring to banks.  When attempting to dispute directly with them, there are few items that you should take note:

• Put your dispute in writing.  Waiting on hold for an hour to tell a call center representative that you are disputing this information is not the best plan of attack.  First, the call center is not designed to handle complex issues like disputes.  They are designed to field questions quickly and efficiently.  Disputes are muddy, and can hardly be resolved in a matter of a few minutes.  In addition, call centers are notoriously bad at following up on issues.
• Never send them originals, only send copies.  You never want to send your original into the bank when making a dispute.  The fact is that more than likely, they will lose it, or a research representative will not know what to do with it and will park it on their desk for a few weeks, with no one else knowing of its existence.
• Make sure you aren’t sending your dispute to a payment processing center.  If you think banks get a lot of phone calls into that call center, imagine what is going on at their payment processing centers.  Anything that isn’t some form of a payment will be quickly discarded and probably not followed up on.

Before disputing any information on your personal credit report, be sure that you have all of the correct information to ensure that process is handled correctly.

Well, the first thing to do is to understand what the free credit report government is attempting to tell you.  There are four main points of communication, or sections, within the report.

• Identifying Information.  This is the basic information that would include name, address, social security number, phone number, employer, past addresses, work history, etc.  This is to ensure that everyone who is using this credit report is evaluating the same person.  It is also helpful for consumers to catch fraud attempts; as fraudsters will typically attempt to change the address to reroute mail.
• Credit History.  This is the meat of the report.  What is included in this section is your payment history, balances, credit lines, type of debt, etc.  When it comes time to for a credit underwriter to evaluate your credit worthiness, this is the main section they use.  This section will also have the biggest impact on your credit score, as the two main factors are payment history and credit in use ratios.
• Public Records.  This section will hold any adverse information that isn’t necessarily creditor related.  For example, if you have an unpaid speeding ticket, it is likely that this bill will eventually show up on public records.  In general, this represents judgments against you in which you owe an outstanding balance of some sort.  Criminal claims are not applicable in this section.
• Inquiries.  This part is probably the most misunderstood section of the free credit report government.  The inquiries section tracks when anyone has pulled your credit report for the purpose of making a credit decision.  That is why it is important to go directly through the credit bureaus when ordering a free credit report.  Pulling the report through any other means will be shown as an inquiry.  Why is this important?  It is important because each inquiry will deduct two points from your credit report.  If you have multiple inquiries over a short period of time, it is typically an indicator that something is wrong, since you are having your credit pulled so often.  That is why it is a good idea to supply a copy of your credit report to mortgage lenders, instead of having them pull them, when you are mortgage shopping.

Free credit report government should not feel intimidating when attempted to review them.  In fact, you probably already know what is on there since they represent you own credit history.  Be sure to take the time and review your credit report fully to ensure accuracy, as statistics have shown that a majority of credit reports from any of the three agencies have some sort of error in them.

Should it be?  One would think that since so much can be impacted by one’s business credit report, such as office rent or financing, that it would be a concern that is closer to the top of the list.  In reality, it isn’t.  This is because so many businesses fail during the early years that they are more concerned with simply surviving, than worrying about their business credit report.  In addition, many business owners just don’t understand business credit.  Even if they have a solid understanding of personal credit reports, a business credit report can be extremely different.

To help shed some light on the issue, let’s take a look at how a business credit score is determined.  The first thing that a credit agency has to do is obtain information.  For individual consumers, this is much easier since the process is refined, and down to a science.  For businesses, there are three main sources as to where this information can come from:

• Suppliers and lenders.  Often times, businesses will need availability to credit in order to purchase supplies or product, which is then sold at a premium.  The proceeds will be used to pay off the credit; then they start the cycle over again.  Established businesses will enter into such arrangements with banks and lending institutions, whereas newer businesses will have to discuss options with a supplier.  Whoever they choose to go through can provide information on their payment history and in general, how well they have managed their credit.  This information is then fed to a credit reporting agency, and will be available on their business credit report, and will factor into their score.
• Courts.  Local, county, and state courts keep everything, so legal filings are available for credit reporting agencies to obtain.
• Everywhere else.  Any other type of background information can be obtained from other sources, which include, but are not limited to public records, credit card institutions, collection agencies, and marketing databases.  This information can sometimes prove to be stale, but nonetheless can be valuable information that is fed into credit reporting agencies.

What is gathered from these sources?  Having sources is one thing, but getting something useful is a whole other issue.  In this case, the useful information that is obtained can be trade payments, public record information, or collections information.  This information serves as the backbone for creating a business credit report.  That is why managing business finances in a timely and accurate fashion can be just as important, if not more so, than personal finances.  Failure to obtain credit can be mean the end of some businesses, as many require credit influx to simply operate.

Is there a score?  And if so, how is it calculated?  Yes, there is a business credit score that is derived from information available on your business credit report.  Like the personal credit score, there is a complex statistically based algorithm that calculates the business credit score.  It attempts to take into consideration the factors that will help determine risk.  In general terms, these are credit, public records, and demographic information.  Credit is an obvious one.  Things like number of trade experiences, outstanding balances, payment history, and percent of credit in use and many of the typical factors you will see in the personal credit score are in play here as well.  Public records factor in liens, judgments, and bankruptcies.  Finally, demographic information takes in to consideration the years on file, business size, and the Standard Industrial Classification (SIC) code.

Taking the time to familiarize yourself with the details of the business credit report and the business credit score can be an excellent tool for business longevity.  Business owners throughout the country can benefit by simply paying attention to some small items like ensuring bills are being paid on time.  This could have a long reaching impact on their business’ future.

How can I get this credit report from?

There are three credit bureaus that participate in the free annual credit report government program, and they are:

• TransUnion
• Equifax
• Experian

Simply contact them directly and they can walk you through the process of obtaining your free credit report.

Why is reviewing your credit report important?

An annual review of your credit report is important since it allows you to stay on top of your financial situation. In general terms, taking advantage of the free annual credit report government program and getting a free copy of your credit report, will help you find in accuracies, ensure that all of your bills are paid, and that they are not a victim of fraud. In addition, it will help any consumer know what to expect when they apply for credit. If there are a lot of delinquencies, or past due payment histories, then it will be more difficult to get approval, or at least they should expect a higher interest rate.

Does my credit score come with it?

No. Only basic credit history information is included in your credit report. Credit scores need to be obtained separately and will typically be at a cost. There are few third party vendors who may be able to offer you free or discounted credit scores, usually in exchange for membership to another site or in conjunction with another offer.

What to look for once I have my credit report?

As mentioned earlier, your free credit report will simply be a file that includes your credit history, but no credit score. A credit score isn’t necessary to determine whether or not you have an excellent or poor credit history. The first thing you should do is to look to see if you have current negative records. These will impact your credit score the most and will weigh the heaviest when credit underwriters are reviewing your file. To have the biggest impact, pay these current immediately. Next, look for anything that may be inaccurate. Perhaps there is an account that is not yours or maybe an account was showing as behind at some point and it really isn’t. This is important because it can be an indicator of fraud.

Then, you want to look to recent inquiries. An inquiry occurs when a credit institution has pulled your credit report in response to a credit application. Credit reports can only be pulled with your permission, and if you don’t remember applying for a loan, then perhaps this may also be an indication of fraud. Either way, excessive inquiries can impact your credit score since each inquiry reduces your score by a couple of points. Finally, you should ensure that all your personal information is correct. The credit report will house information such as current address and work history. These items are typically used to validate identity, and if this information is not accurate, then again, it could be an indication of a fraud attempt.

Can I get a report more than once per year?

In addition to the free annual credit report government program, that allows a consumer to obtain a free copy of their credit report once per year, a consumer may also get a free copy of their credit report within thirty days of being denied for credit. In other words, if information from a credit report was used during the approval process for anything, such as a loan application or payment plan approval for insurance payments, and the request was denied, then the applicant has the right to obtain a free copy of their credit report. In the past few years, many other third party vendors have started to offer free credit reports regardless of the circumstance. Typically, these offers are part of an overall marketing program that will usually cost consumers a monthly fee down the road. The best, safe way to obtain a free credit report without being barraged by advertisements is directly through the free annual credit report government program.

The fair credit reporting act contains numerous rules that are aimed at protecting consumers by requiring credit bureaus to do a number of different things. The following list is not an exhaustive list of all of the requirements, but it covers many of the main parts.

• Disclose your credit file to you upon request. Credit bureaus must provide information in your credit file if you request it, provided you can provide proper identification. Consumers are allowed one free credit report per year, or thirty days after they have been declined for credit.

• Limit access to your information. Credit bureaus may not provide your credit report to any institution that lacks a legitimate purpose, such as credit underwriting for a loan, credit, service, or employment. Other purposes could include several business and legal uses.

• Get your consent before providing your information to an employer. A credit bureau may not provide credit information to an employer or potential employer unless you first give that employer written permission to request your credit report.

• Investigate disputed information. If you tell a credit bureau that your file contains inaccurate information, the agency must immediately investigate the matter with the creditor that provided the information. If the subsequent research fails to resolve your dispute, you may add a statement to your credit file to serve as explanation of the matter.

• Correct or delete inaccurate information. A consumer reporting agency must correct or, as the case may be, delete from your credit file the information that is found to be inaccurate or can no longer be verified. The consumer reporting agency is not required to remove accurate data from your file unless it is outdated.

• Delete outdated information. In general, negative information that is more than 7 years old (10 years for bankruptcies) must be removed from your file.

• Remove your name from marketing lists upon request. Consumer reporting agencies can provide lists of consumer names and addresses whose credit information matches the requirements of creditors and insurers for making firm offers of credit or insurance to the consumers on the list.

• Disclose your credit score to you upon request. You have the right to request a credit score about you.

• Add identity theft and active duty alerts. Identity theft victims may place fraud alerts and active duty military personnel serving away from their regular duty station may place “active duty” alerts to help prevent identity theft.

• Remedying the Effects of Identity Theft. If you are, or believe that you are, the victim of identity theft, you have specific rights under the FCRA. These rights will help you deal with the effects of identity theft.

There is a lot of protection offered by the fair credit reporting act to ensure that consumers are protected against fraud activities and credit reporting inaccuracies. This allows consumers at least a certain level of protection against these types of issues. Even in the event of something showing up on a consumer’s credit file, the fair credit reporting act gives remedies for addressing them in a structured manner.

The fact is that your credit history is important, and any negative information can have a drastic impact on your life. If the fair credit reporting act didn’t exist, consumers will be completely at the mercy of credit bureaus. Without any legal requirements, they would most likely not be inclined to work on ensuring that inaccuracies are removed. Instead, since the act does exist, consumers can rest assure that there is a level of security with regards to their credit information.

There is plenty of other information within the pages of the fair credit reporting act and the list above by no means represents the full list. It is intended to give you an idea as to the lengths that consumers, and their financial information, is protected.

Functions of the Credit Bureaus

Of the 3 major credit bureaus, Equifax is the oldest. Information such as payment histories, loan balances, and any other debts are available for by financial institutions, utility services, and any other creditor. The credit bureaus, in turn, prepare a comprehensive credit report, which contains personal details like name, current and past addresses, work history, social security number, lawsuits, public records, and arrests of the individuals. There are details of financial transactions conducted by the individual during the year. There are other sections in the reports, which contain information about inquiries and collections. Inquiries give details of the people and agencies/companies that had accessed the report of the individual and the reasons for it. Collections contain the outstanding judgments and payments against the individual.

Apart from these, the 3 major credit bureaus provide other services for a fee. The credit reports are free of cost but they do not contain the credit score. The three bureaus prepare their credit scores separately and individuals can purchase them from the websites.

• Experian prepares business credit reports too
• TransUnion was the first bureau to offer online services for accessing credit reports.
• Equifax offers consumers, credit monitoring services and another service known as Credit Lock, which prevents other organizations from viewing the credit report.

Laws Governing the Credit Bureaus

The Fair Credit Report Act, Fair Credit Billing Act and The Fair and Accurate Credit Transactions Act have set some rules and norms, which have to be followed by the credit bureaus. The rules provide that the consumer can access his credit report for free once in a year. Also, no one other than the consumer can access the report without his explicit written permission. Many of these laws are in place to protect consumers from fraud or credit reporting inaccuracies. The 3 major credit bureaus have to adhere to these rules and regulations, and do an excellent job at mitigating the risk to consumers.

Are these the only credit bureaus?

There are numerous other credit bureaus but only the 3 major credit bureaus mentioned above are authorized by the government to provide the credit report to the consumers. This, in essence, makes them the definitive source for credit information and the preferred location for creditors to obtain this information. Many third party vendors have partnered with these credit bureaus to offer value add solutions that attempt to summarize and present this often complex financial information to consumers to make it more digestible.

As a consumer, the ability to get information directly from the 3 major credit bureaus is great. It puts you in a position to see the same information that credit underwriters see when they are making their decisions. There should be no surprises. Especially if you are pulling your credit report once per year as recommended. This will help you ensure that there is no fraud activity or payment history inaccuracies.

This is a great tool that simply wasn’t available a few decades ago. With the explosion of the internet, information has become more transparent, and the 3 major credit bureaus are no exception. Making this type of information as accessible as it is has been a great help with consumers and credit institutions alike. In an instant, a consumer can walk into car dealer, test drive a car, and the dealership can have a credit approval for that individual before they leave the lot. This type of speed in decision-ing is made because of the 3 major credit bureaus ability to provide timely and accurate information, quickly to the correct source.

Improving Your Credit Rating

A free credit report offers you the chance to improve your credit ratings, and whether it is bad or good, there is always room for improvement.  Receiving the reports in advance will help you rectify the bad credit history before you approach a bank or any other financial institution for credit.  Bad credit can be eliminated by paying bills on time, settle outstanding debt commitments and remove unnecessary credit lines.  Once you take care of the issues mentioned above your credit rating will improve greatly that when you present your free credit report to lenders, they will not hesitate to give you a loan.

Financial Awareness

Having a free credit report is crucial in ensuring that you are aware of how you are performing financially.  Not having a record of all your financial transactions will likely to cause anxiety that is not good to your overall health.  It is advisable that you know how you spend your finances so that you do not enter into debts without noticing.  With a free credit report you will be aware where you stand financially hence make wise spending decisions that will maintain your good credit ratings.  Having a free credit report leads to one being financial independent.

Asset

A free credit report acts as an asset in disguise that can be used to secure credit from various banks and other lending institutions.  We apply for credit for various reasons such as emergencies, to purchase a car, house, pay school fees.  Hence, you will need to convince the bank or lender that you are going to repay back the loans without difficulties and this is where the free credit report comes in handy.  Your free credit report will show your credit history and how you been repaying your loans and other financial commitments.  For Americans who have been prompt in settling their debts, their free credit report will have good ratings and lenders will certainly give them loans.  A free credit report will help you secure employment in most institutions.  Employers will see you as an efficient financial manager because they expect you will extend this trait when handling company financial resources.

Security Purposes

Ordering free credit report is a sure way of determining that no one has access to your finances apart from you.  It protects you from identity theft so that you do not pay for goods and services that you have not authorized.  If you are not sure about a particular transaction or feel that you are a victim of identity theft, you can order cancellation on all your credit cards.

Clarity of Information

When you order to get free credit report from one of the three major credit bureaus, they will send you your report and this is a good way to confirm that the information shared are true.  It is a great idea to order free credit reports from all three of the credit bureaus (TransUnion, Equifax, Experian), to ensure that all your personal details are correct, and that your balances are the same in all the credit reports.  You should take advantage of receiving free credit report to rectify any misleading information so that you portray your true financial image.

Loans

Another reason why it is crucial that you have a free credit report is that it will determine your bargaining power when you apply for various loans from banks and other financial institutions.  A free credit report shows your credit history of how you have been repaying your debts, how many loans have you applied, how many credit cards you have.  Various US Banks and other financial institutions will analyze the information on the free credit report and decide whether you qualify for a loan.  A favorable free credit report will work to your advantage in securing loans at low interest rates, hence without this report it will be impossible for you to convince the bank to give you a loan.

Accuracy of Information

Another importance of having a free credit report is that you will be able to confirm whether your personal data and financial history is correctly printed.  The report contains your names, date of birth, addresses, telephone numbers and this will be the ideal time to confirm if they are in order.  At times credit reference bureaus print wrong information on the free credit report that can portray you differently than you expected.  For example, you may have cleared all your debts but the credit reference bureau has not received this information.  When they print the annual free credit report they will print it according to what is in their records, the impact of this is that you will be seen as a defaulter since your balances show you have debts.

Employability

Free credit reports go long way in determining if you are to be employed or promoted to another post. Employers are very keen in knowing your credit worthiness before they can absorb you in their companies.  Especially for those who wish to work in financial institutions where you will be responsible in handling other people’s finances, a free credit report will show how you manage your own finances and if you have good credit rating chances of landing that job is high.  Employers see this situation as a particular trouble spot should they employ someone with a less than desirable credit history.

Financial Management

Free credit report also disciplines a person’s way of spending and teaches you how to manage your finances.  If the report is obtained annually, it has all the details of your current debt balances; you will be able to know whether or not you have been effective in any debt reduction strategies.  With this information at hand, one will be able to make sound financial decisions and prevent previous sending habits leading to increase debt.  A free credit report acts as a benchmark that you should strive to maintain to attain financial independence. It will enable you to see the areas you need to improve on, non-critical areas of spending that can be avoided such as extra credit cards that add strain to your financial resources.

Cost

Another importance of having a free credit report is it comes at no cost to you.  You do not have pay any fees to credit reference bureaus to get the information.  Under the law, consumers have a right to receive free credit reports upon request.  The free credit report is instant and does not a long time to be delivered to your mail; most credit agencies deliver within 15 working days.  You can also access the free credit report online from various sites if you have any clarification to make regarding your financial status.

Prevents Financial Problems

Having a free credit report is the first step in avoiding financial difficulties that many people find themselves in.  With a free credit report it will be easier to manage your expenses, as you will be monitoring your debt.

Security Reasons

A free credit report provides the opportunity to monitor any unauthorized activity on your credit and debit cards.  Cyber-crime has become prevalent in this era of information, people end up providing personal details on the internet deliberately or without their consent.  The information will be used by identity thieves to gain access to your financial accounts, make purchases, and launder money without your knowledge.  Therefore, it is advisable to order credit reports to ensure your finances are in order.  A free credit report offers the chance to confirm whether your personal details are correct.  Your date of birth, names, marital status, telephone and addresses are on the report hence this will be the best time to confirm the details and if there are other modifications to be done.

Small Business Growth

Most Americans that own small businesses would like to see it grow in the future.  In addition, most Americans that own small businesses know that their small business is simply an extension of them.  Since their business is either too small or too new to substantiate its own credit, they know they have will be called on to personally guarantee any financing they attempt to obtain.  Monitoring your free credit report can help any business owner ensure that their credit is in adequate enough condition to guarantee any loan growth for the future.  Banks are always willing to do business if the situation is right and the risk is minimal, a free credit report is a tool that you can use to minimize the risk since it shows your ability to repay loans.  Once the bank is satisfied with your credit history, they will probably approve the loan you had applied for at a reasonable and competitive interest rate.   A free credit report can be used as a bargaining tool to get favorable interest rates based on your credit history.

Obtaining Employment

Many human resource departments in the United States are now using credit reports as a basis for approving or denying employment.  An applicant’s ability to manage their finances is being used as an indicator for their management skills, amongst other traits.  Whether or not consumer advocacy groups agree with this tactic, it is a legal and widely used form of employment screening in today’s environment.  This means that now, more than ever, any job seeker should be ordering a copy of their free credit report to ensure accuracy before submitting their first job application.  It is much better to not be surprised when attempting to obtain the job you always wanted.

There are many reasons to review your free credit report, and these are only a few.  There are no reasons not to.  For starters, it is free.  That alone should be reason enough to order your copy of your free credit report and start to put yourself in charge of your finances.  Doing so, will put you in charge of your life, and ensure that you get the financing, and quite possibly the job, that you deserve.

Before the internet, credit reports were sight unseen for individual consumers.  They existed in the background only as a tool used by lenders and underwriters to ascertain the credit worthiness of applicants.  Today, information has become more transparent, and the credit reports naturally turned into something that consumers wanted to review, understand, and even manage to ensure that their lending requests are approved.

Why review your credit report.  The best way to ensure this is by reviewing your credit report.  However, this can seem costly as many of the service providers offer a monthly charge of around $20 for this service.  This can add up over time, and probably does not give an individual a good value proposition and will eventually be looked at as an unnecessary cost.  There are benefits to obtaining your credit report though.  For starters, it will assist you in identifying any fraud activity quickly to mitigate the damage.  It also allows you to notice inaccuracies in a timely manner, which will greatly increase the likelihood of getting it fixed and corrected easier through the creditor.

Another benefit it that it will allow you to stay on top of your financial situation and view yourself as an underwriter or lender does.  This is invaluable in helping to make short and long term credit decisions like whether or not you should take on more debt, pay down some debt, or consolidate your debt. These types of decisions can have a rather large impact on your credit score as well, especially if you have even a basic understanding of how it is calculated.

Where to go.  Okay, so we have determined that it is a good idea to review your credit history, and that we are fortunate to live in a time when that is possible.  Now what?  Where can you go to get this information?  First and foremost, if you have never requested a copy of your credit report, and you wish to obtain a free credit report without a credit card being used, then your first stop should be one of the three major credit bureaus.  By law, they are obligated to provide you with a free copy of your credit report once per year upon your request, as illustrated here at www.freecreditreportsinstantly.org.

In addition, the three credit bureaus, TransUnion, Equifax, and Experian must also provide you with a free credit report in the event that you were turned down for credit recently based on information provided on your credit report.

There are many places on the internet offering free credit reports, but unfortunately, in my research I have found that most don’t offer a free credit report without a credit card.  Instead, they offer a free subscription for a short period of time if you provide your credit card (which they claim is for verification purposes).  After your introductory period, they begin to charge you monthly for their services.  There are a few websites that don’t attempt these types of tactics.  The first is a www.quizzle.com which offers their customers a complete view of their finances, including a free Experian credit report, with an internally calculated (non-official) credit score.  This score is a good enough gauge for someone to determine their credit worthiness.

Another site that offers a free credit report without a credit score is www.creditkarma.com.  The attractive thing about this is that they offer both a free credit report and a free credit score.  You must be ready to endure a lot of ads however, as this ensures that the site remains free.