Free Annual Credit Report

A car or a house is purchased by most of us through a car loan or a home loan; students get student loans to pay their tuition fees and to meet other expenses. All of us make purchases using credit cards. However, have you ever thought how you would be given credit by a bank or a credit card company who know nothing about you?

For a bank and a credit card company to grant loan and issue you a credit respectively, they need to have certain amount of information about you. A bank or a credit card company collects the information regarding your credit history from an agency known as Consumer Reporting Agency (CRA). This agency records all your credit activities to generate a report known as credit report.

What is a credit report

A credit report is an important document that reveals your financial position and it is used to generate your credit score. To make it clearer, a credit report contains the information regarding your credit activities such as number of credit cards you hold and the names of the credit card companies who issued the cards, all the loans (home, auto loan, personal loan and mortgage loans) you have taken and the names of the financial institutions that you are associated with. This report also includes the information regarding the late payment of your utility and credit card bills. If you have filed for bankruptcy, that is also entered in your credit report and will be in your record for the next ten years. In short, a credit report reflects yours credit history and the credit rating; your credit score decides whether you are eligible for credit or not.

Free annual credit report

On September 1, 2005, the consumer protection agency of the US government, Federal Trade Commission (FTC) passed a law by which every American citizen is entitled to get a free annual credit report. The credit report is generated by the three main credit bureaus of the United States - Equifax, Experian and TransUnion.

You can also request for a free online copy of your annual credit report at annualcreditreport.com. Once you apply online, you would have to wait for at least fifteen days before you get your credit report.

Apart from getting a free credit report from the three credit bureaus once in a year, there are times when you are eligible for receiving a free credit report.

• You can apply for a free credit report from one of the bureaus if you find any discrepancy in your report.
• If a credit card or an insurance company has rejected your application on the basis of your credit rating, you can apply for a free credit report.
• If you are unemployed and plan to look for a job in a time span of 60 days, then you can approach one of the bureaus for a free copy of your credit report.
• You are entitled for a free credit report if you are living on a welfare program.

Suppose you are not facing any of the above-mentioned problems, but wish to receive a free copy of your report, you can take the free membership of any of the online credit repairing agencies. However, ensure that you cancel your membership once the trial period is over; else you will have to pay a small charge for the same.

It is not necessary to order your copy of the credit report from all the three credit bureaus at the same time. It is always wise to check your credit rating once in three months to find out if there are any incomplete or inaccurate entries in your credit report.

In case you come across any inaccurate entries, you can report to the consumer reporting company or the credit bureau in writing regarding the discrepancies. The credit bureaus would conduct an investigation on your behalf within 30 days and make the necessary changes if there are any inaccurate entries. Once the investigation is complete, the consumer reporting company will send you a free copy of credit report with the changes made.