How to Get Your Free Credit Report

Do you know that you can get free credit report? If you don’t know, the answer is ‘yes’.  One of the principles I embraced which has helped me achieved some savings is the statement that you should not pay for what you can get for free. You can apply this principle too. If you can truly get free credit report, why should you need to pay for it? At times, what you need in order to achieve certain success in life is just a piece of information and not money. But some people believe that if you don’t have money, then nothing can be done.

We all know the importance of credit report. Some of the financial dealings you will need to make will require the assessment of your credit report. For instance, if you want to buy insurance, secure auto loan or rent an apartment, an inquiry will be made on your credit report. Don’t forget that such inquiry constitutes a hard inquiry which may stay on your credit report for a long time. And this may impact on your credit score negatively. Apart from the fact that you are not paying anything to get free annual credit report, the main advantage is that, it is considered a soft report. It does not affect your credit score in anyway. So, how do you get free annual credit report? This is what this article will address.

Read Also: How Long Do Hard Inquiries Stay On Your Credit Report

How to get free credit report

If you don’t know, I want to inform you that with the Fair Credit Reporting Act, everyone is entitled to one free credit report annually from the top three consumer reporting agencies. This means you can get Equifax free credit report, Experian free credit report and Transunion free credit report once every year. You get your free annual credit report by applying for it. Of course, even though it is free, you will be expected to provide some information about you such as your name, address, date of birth and your social security number for verification purpose. You don’t need to apply for free annual credit report directly from the three consumer reporting agencies mentioned. You will apply through Annualcreditreport.com. From there, you will then be redirected to any of these consumer reporting agencies as indicated by you. Please note that internet is filled with many websites advertising for free credit report. Some of them are out to collect your personal information so that they can sell it to other organisations. Annualcreditreport.com is the only recognised channel through which you can get your free annual credit report in United States of America. However, if you try to access this site outside US, you may be told that it is not currently available in your location. You have the option of getting your three free credit reports at the same time or you can choose to get one at a time. The advantage of applying for the free credit report from these three agencies at the same time is that, it gives you the opportunity to compare the transactions that appear on each report. If there is any discrepancy, you can easily notice it and seek for correction. You can apply for free credit report online or by mail. If you are applying online, you will be asked series of questions which they believe only you should know for identity verification purpose. Anybody can pose online to be another person. That means if the person succeeds in providing answers to the questions, it would be assumed that the person is the right owner of the account. That is why you are encouraged to always keep your information safe. On the other hand, if you can’t provide accurate answers to the questions you are being asked, you may be asked to apply through mail. This will require that you supply certain document in order to prove that you are the right owner of the account. If you are accessing your free credit report online, it is always advisable to save it somewhere else as you may not be able to access it again without you paying. If you decide to print out the free credit report, you should endeavour to keep it in a safe place in order to avoid identity theft.

Besides the general free credit report that is available to all card holders, you can still get free credit report under certain circumstances as enumerated below:

  • If you are unemployed and seeking for job, you can request for a free credit report. I believe that you will not like to be denied a job opportunity on the ground of bad credit. On this note, it makes sense to tidy up your house in anticipation of such job opportunity.If you come across any thing on your credit report which may make employers to turn down your application, you can quickly fix it.
  • If you have just suffered rejection from an employer or financial institution: Supposing you applied for an employment in which you perform very well only for you to be denied on the ground of bad credit, you can apply for a free credit report to find out the in-depth reason for such rejection. The same thing can happen i you are denied loans, insurance or credit card. However, you will only be able to secure the free credit report from the consumer reporting agency that provided your credit information to the employer or financial institution. You need to ensure that you request for your free credit report within 60 days your application is rejected. If this period elapses, you will no longer qualify for the free credit report.
  • If you enrol under welfare scheme. Welfare is a form of financial assistance to individuals who cannot provide for themselves. Sine those people living under the welfare scheme are facing some financial stress already, it will be unfair to ask them to pay for credit report again
  • Inaccurate report due to fraud. If you are convinced that the information on your credit report is not accurate due to identity theft or fraud, you can be granted free credit report.

Free Credit Report

Why free credit report?

Having your free credit report will allow you to know your credit status. If you don’t visit a doctor, you may not actually know whether you are sick or not. Let me put it in another way. If you have gone to school whether elementary, college or university, there is something they call continuous assessment. The system allows students to be assessed continuously without having to wait till the end of a session before they can have the understanding of how they are performing. Continuous assessment allows students to know both areas of their strengths and weaknesses. Imagine if a students should wait till the end of the session before they are assessed. The results will be woeful. In the same way, it is important you understand where and how you stand per time in term of your credit status. Without your credit report, it will be difficult for you to ascertain your credit status. Knowing your credit status will help you take the right step towards improving your credit score if there is need for that. With your free credit score, you can easily identify errors on your report which might impact negatively on your credit and quickly seek for correction. Also, for you to qualify for certain loans, you are expected to have a certain credit score minimum. Knowing your credit status will guide you whether to apply or not. It is better not to apply for a loan at all than to apply and be declined. Inquiries on your credit as a result of loan application are hard inquiries. This will not only stay on your report for a long time, it has the effect of lowering your credit score by few points. Therefore, it is good that you take advantage of the free credit report.

Read Also: Effects of Late Payment on Credit Score

What to expect in your credit report

It is not enough to get free credit report. You need to make use of it and ensure the correctness of information in the report. Perhaps you have never applied for free credit report before or you have been getting it but you don’t do anything about it, it is high time you understood why the report can be very useful to you. The next time you get your free credit report, these are the information to look for:

Identifying information

Your personal information will include your name, your current and previous addresses, social security number, date of birth and your employment information. You may wonder why your employment information will appear on your credit report. It will definitely appear if you supplied it to your creditors or other financial institutions that the credit reporting agencies. Why do you need to pay attention to this information? While the information may not be used to score your credit rating, they are used to identify you. You need to ensure that they are correct and free from mis-spelling.  Also, you need to ensure that you keep this information secret to yourself. Otherwise, you may fall victim of identity theft or fraud. One of the ways you can discover if you are already a victim of identity fraud is when you find an address where you have never lived in on your credit report. It is true that this may not have any impact on your credit rating, but it is good that up follow up the matter. If it is a mistake, it can be rectified. And if it is identity theft or fraud, you will know how you can quickly take steps in protecting your accounts. It can even spur you to have a closer look at all the accounts listed in your credit report so that you can be sure that they all belong to you.

Credit Accounts

This aspect is very crucial to your credit ratings. This section contains all types of loans and credit you have established with lenders. This will include all instalment loans such as mortgage loans, student loans and auto loans. Other credits such as credit card balances and lines of credit will also be listed here.  Vital information about these loans such as the dates they were opened, the loan amount and your credit limit, the outstanding balances and your payment history will be included here.  Almost all the information that credit scoring agency uses in determining your credit ratings will be found here. The five components with their associated weights used in determining your credit score are:

Payment history: 35%
Amount owed: 30%
Length of credit history: 15%
How many types of credit in use: 10%
Account inquiries: 10%

In fact, lenders use this information to assess your credit worthiness. They look at your credit utilization ratio, that is, the ratio of your debts to your credit limits. By yourself, you can even assess yourself by dividing your total debts by your credit limit. Whatever answer you get is your credit utilization ratio. It can be expressed in percentage. The lower your credit utilization ratio, the better effect on your credit score and the more likely the lenders will be willing to grant you credit. It is suggested that it is better to have thirty per cent credit utilization ratio. If it seems that you are maxing out your credit, you can approach your card issuer to increase your credit limit. If you have good payment history or you can prove that you have additional source of income, your card issuer may grant your request.

This seems like a digression. I intentional talked about all these so that you will know how important this section is. Therefore, if you discover any error regarding your loan amount or your payment history, it is better you quickly write to the agency so that investigation can be carried out in order to correct the error. Also, if there is any card balance in your account which you are not aware of, it can be that someone has used your identity to open a apply for credit card. If this happened, you may not know until you get your free credit report as the person may ensure he never misses making minimum payments on the account.

Inquiries

All inquiries made on your credit will also be listed on your credit report. Each time you apply for loans, credit cards or insurance, inquiries can be placed on your credit in order to ascertain your creditworthiness. The Fair Credit Reporting Act (FCRA) allows certain class of people and businesses such as banks, creditors, insurance companies, landlords, employers and utility companies to pull your credit if you have previous, current or potential relationship with them. However, in order to avoid abuse, before any of the people or organizations listed can pull your credit information, the reason for the inquiry on your credit must fall within the permissive purposes as spelled out by FCRA. Some purposes will require your permission while some may not. So, when you receive your free credit report, you need to check all the inquiries made on your credit. If you find out certain inquiry which you believed you didn’t authorise, you should contact the organization concerned or direct your complaint to the credit bureau.

Collections and Public records

If you have any unpaid debt that has been handed over to collection agent, it will appear on your credit report. Also, credit reporting agencies will include public record information relating to bankruptcy, repossessions and foreclosures which they might have collected from courts, in your credit report. Any issue relating to repossessions and foreclosures can stay as long as seven years on your credit report while that of bankruptcy can last for ten years.

In conclusion, the essence of applying for free credit report is not just to take advantage of the fact that it is free. It is to ensure that all information on your report are accurate and up to date. Therefore, you have the responsibility of scrutinising the content of the report. If there is any information that is not correct in it, you should report to the credit bureau immediately in writing. Both the reporting organisation and the credit bureau will investigate the matter within thirty days and ensure that such mistake is corrected and communicated to other credit bureaus. The other credit bureaus will in turn update their records with the correct information.

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