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credit report free

The Importance of Accessing Free Credit Reports

1. Understanding the Significance of Credit Reports

Credit reports are necessary when concerned with access to credit. They are initiated when a lender requests the report from a credit reporting agency when an application for credit is filled out. The resulting report contains information on the application, as well as information on any accounts subsequently opened based on the application. The report is instrumental in the credit-granting process. Credit reports play a huge role in determining whether potential given credit is of sound financial responsibility. A consumer’s credit worthiness is judged based on information contained in the report. With the aid of a credit report, the lender can determine how much credit should be given. When the reports show that an individual is high credit risk, then the lender can deny the credit application altogether. The reports also affect the credit terms. Information in the report is used to decide the rate of interest, the deposit required or if an individual is turned down for credit. If the information within the report is negative, then the individual is faced with the option of high interest rates or no credit at all. An adverse action on the part of the lender based on information found in a credit report can trigger provisions under the Equal Opportunity Act and the Fair Credit Reporting Act. These require an explanation on the part of the lender as to why credit was denied. Credit reports are very important in various instances of our lives. With reports of children in college, of adults paying for a first home, credit cards and new cars, and then reports of older adults trying to supplement social security or other jobs. In such instances, it is important to have overwhelming evidence of sound financial responsibility. High-quality credit reports can be an aid in achieving these goals.

2. Benefits of Accessing Free Credit Reports

A credit report carries all the necessary details about your current and past financial status. It is reported by reporting agencies. These reports play a very critical role in gauging your financial status. They provide a security of your financial status to banks for debt and for potential employers. Credit reports carry very high significance for all people with different financial statuses. There are many advantages to check your credit report. The biggest advantage of a credit report is to comfort your credibility level. Sometimes there are errors in the reports, which can adversely affect your financial credibility. It may be late payments on bills, loan yes/no, etc. All this affects your credit ability. Although getting loans and cards make your credit ability. But it is important to know whether it is going in a positive manner. If it is not, then you can make necessary changes to regain your status. It gives an opportunity for damage control in case if your financial status is not good. This in turn will help you to have affordable debts loans next time. This will prevent you from having debts which you cannot afford. You always try to find the best loan rates, credit report will help you in this case. With better credit rate, you will easily qualify for loans and debts with lower interests.

3. How to Obtain Your Free Credit Report

There are three major credit reporting companies: Equifax, Experian, and TransUnion. Each of these companies is required to provide you with a free copy of your credit report once every twelve months. In fact, by logging onto the internet and doing a quick search, you will find that there are many websites that offer credit reports for free, which seems like a great deal. Unfortunately, many of these companies will be using the catch of a free credit report to try to sell you a product, such as credit monitoring, credit repair, or an overall credit improvement service. It is important to remember that these are often provided in a trial period in which you must cancel if you do not wish to be charged. Some people may prefer this quick and easy way to view their credit report. However, for those of you who are like me and hate dealing with the hassles of remembering to cancel a subscription, the most effective way to get a free credit report is by directly visiting the credit bureaus. This can be done by going to the Annual Credit Report Request Service website or simply by visiting each of the three credit bureau’s websites and submitting a request. Finally, if you are the type of person who prefers good old-fashioned snail mail, you can obtain your free credit report by mailing a request to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.

4. Interpreting and Utilizing the Information in Your Credit Report

The credit report is difficult to understand since it isn’t totally obvious what is being said. There is some code or shortening linguistic use used that isn’t viably explained at the credit report site or from cash related pros. Making sense of how to get to and translate your credit report is the underlying stage in choosing your credit status. Each segment drops off with an isolated line which portrays what number, (for instance, 30, 60, or 90) addresses your credit peril on that particular thing. A code of RR infers that it is being represented to be a reimbursed record. An R1 implies brief portion all through that time after has no vulnerability exhibiting the best credit hazard. An R9 may demonstrate that you have a section on document with an awful debt collector, or potentially a segment or judgment. An I9 is uncommon in that it is an inquiry from an industry credit report to buy two fold on a customer. This would not be found on a purchaser credit report. L9 is an understanding to give up items. C codes are progressively bewildering and a portion of the time unsurprising data credit granting to give association. A C1 is a declaration of buyer has met, (for instance, charge) C2 meaning this is new past the entryway, and C3 is an assertion to recoup what is owed in the event of a default on portion. The most easy way to deal with interpret anything on your credit report which you don’t understand is to request its significance. This transcendent understanding capacity is up until now a critical check to cash related accomplishment which can put aside exertion to appreciate.

5. Taking Action to Improve Your Credit Score

Take action to improve your credit score. Once you have identified erroneous information in your report, it is important to take action. The Federal Trade Commission (FTC) provides information on how to correct errors in your report. It is important to follow the correct instructions, as to get the best results. The FTC also provides a sample letter that can be used when contacting a credit reporting company. Sending it certified mail and request a return receipt so that you have proof that they have received your correspondence. Your proof of their receipt and the return receipt will provide excellent documentation if it becomes necessary to prove that the credit reporting company did not respond in an appropriate manner. Negative but accurate information will remain on your reports for at least seven years and bankruptcy will remain for 10 years. Information that is too old can be challenged and the credit bureau will must verify that the information is accurate and if it cannot be verified, it must be deleted. Highly charged negative, but accurate information can hurt the most. It is unfortunate that medical bills can be considered differently than other debt. An attempt to level the playing field has been made by the three credit bureaus. They decided that medical debt delinquencies will not appear in a credit report until 180 days have passed since the account first became delinquent.