Credit Reporting Agencies and Your Free Instant Credit Report

Back in the 60s when the American public first learned how to use credit and the credit report card came into being, literally thousands of credit reporting agencies sprouted up across the country. Many many mergers and buyouts later, we're left with three major credit agencies: Equifax, Experian, and TransUnion. These three agencies are so powerful that they can mean the life - or death - for your chances of getting credit anywhere.

So what are credit reporting agencies and what exactly do they do? These CRAs are private companies make a living by collecting data from lenders. They obtain your financial information and put all the information about you into one comprehensive report, which is called your credit report. Studies have found that based on the scoring models/formulas of these credit reporting agencies, the information on your report is a good gauge of the probability that you will pay back what you borrow.

The United States is a predominantly credit society. Almost everybody buys everything and charges it to their credit card, and then pays the bill when their salary comes in. It is very rare that you'll see anybody walk around with a big amount of cash in their wallets, but you'll likely see a lot of credit cards.

Since the subprime crisis, lenders have become extremely careful about whom they lend money to. This wariness has been elevated with the closure of many financial service companies due to bankruptcy. Subprime loans were given to people who didn't have a good credit score and it turned out that eventually they couldn't pay for their loans. As more loans went unpaid the lenders lost money, even as consumers' personal credit reports got dinged and credit scores plunged down due to non-payment.

You'll hardly find a lender these days who will lend you money without looking at your credit report first. So what's a consumer to do? There are two answers we have for that question: first, get your free instant credit report and study it closely; and second, do everything you possibly can to improve your report and raise your credit score.

The Federal Trade Commission allows you to get your annual credit report for free instantly if you obtain it from any one of these sites: Experian, Equifax, TransUnion, or AnnualCreditReport. You're entitled to one report from each of the Big Three credit bureaus, and you can get all three at the same time or schedule getting your reports a few months apart. Getting all three simultaneously helps you compare the information in the reports, but spacing out the reports allows you to monitor the increase/decrease of your credit score over a period of time.

It is of prime importance that you familiarize yourself with what kind of information goes into your instant credit report, and take the necessary steps to clean it up and improve your score so that if and when you do need credit, you'll sit easy knowing that you have a big chance of having your loan application approved. You can start by getting a copy of your credit report for free, using credit wisely, and learning the best ways to use credit and improve your credit score at the same time.

Free Instant Credit Report
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