A credit report is a powerful tool that explains whether or not individuals are reliable borrowers.
These documents carry extensive information, including the consumer’s identification information, loan and credit history and public records. Specifically, an annual credit report provides lenders with background information to help them determine if the borrowers have a history of paying off their debts and bills.
For these reasons, adults should request this information on a regular basis to ensure that this data is correct.
Generally, most U.S. citizens can request a free credit report once a year. Individuals who are unsure about these documents may ask, “What is a credit report?” Not knowing credit scores or the information included on reports can have negative consequences for credit users in the future.
This is especially true when it comes time for consumers to take out loans on houses or cars or even to obtain new credit cards. Conversely, users who check credit report information on a consistent basis are more likely to maintain good financial health throughout their adult lives.
How do I request my credit report?
Many individuals want to know how to get a free credit report once they learn that they are eligible to obtain this information. Each calendar year, consumers are permitted to obtain one copy of this information at no cost to them. The information provided in these reports comes from three credit reporting agencies, which include:
The best free credit report that individuals can obtain includes information from all three of these sources. The Federal Trade Commission (FTC) provides additional information relating to how consumers can request these sources, but users can generally complete this task online or over the phone.
Is my credit report different from my credit score?
Sometimes, consumers may confuse their credit score with their credit reports and believe that they do not need to request one if they have the other. However, these two items are not the same and offer different information to consumers. Specifically, credit scores provide borrowers with numbers that generally represent their credit health. On the other hand, reports display specific information about users’ spending and borrowing habits.
Furthermore, many credit reports do not include the scores within them. Since these scores are less detailed than reports, they are usually easier to request and secure. In fact, borrowers who want to know their scores can usually obtain these totals more frequently because this information is generally updated once each month.
In many cases, users can check their credit scores through the banks that issue their credit cards. Users may be able to check their scores by:
- Reviewing the information printed on their monthly bank statements. However, it is up to each bank’s discretion to determine whether or not they send out this information each month.
- Obtaining the information online. Enrollees who bank electronically may be able to check their scores through their banks’ online web portals if this option is available to them.
- Calling their credit card companies and requesting the information. Cardholders can request this information directly from their banks, so long as they confirm their identity beforehand.
Users must remember that most banks will supply enrollees with their FICO credit score when they request this information. Alternatively, some individuals may obtain their VantageScore instead. In any case, this number is useful to individuals who want to keep track of their borrowing and payment histories.
While it is important to maintain a good credit score, cardholders need to also keep in mind that their credit card history only makes up a small portion of their financial portfolios. For these reasons, users should consider obtaining their annual credit report review in addition to their credit card scores. This helps to ensure that consumers have a thorough understanding of their financial wellbeing.
Benefits of Ordering a Credit Report
There are many benefits for individuals who would like to obtain a credit bureau report. These summaries provide borrowers with critical information about their financial histories.
Additionally, a free yearly credit report can also offer consumers insight into whether or not they may qualify for low-interest loans or specific credit cards in the future. However, there are additional benefits that individuals can receive when they request this information.
One of the most important reasons that individuals should request their free yearly credit report is because it is one of the easiest ways to detect identity theft. When consumers receive their annual credit report, the documents provide detailed information about any accounts that were opened using their Social Security Numbers (SSNs).
Likewise, users can also see if any banks, landlords or lending companies conducted any hard inquiries into their credit history. When referring to credit, a hard inquiry is a formal examination into individuals’ credit histories to determine the likelihood that they would be responsible with loans.
If consumers receive their credit report and notice any errors, they must contact the reporting agency. Under the Fair Credit Reporting Act (FCRA), this information must be corrected if individuals can prove that it is inaccurate.
As a result, these consumers will eventually notice that their credit scores will improve once these errors are removed. Since individuals will know what to look for in their reports, this knowledge can help to prevent consumers from being the victims of identity theft in the future.
In some instances, individuals may be reluctant to request their annual credit report because they have a history of mismanaging funds or because they have sizable debts. However, this should not stop consumers from requesting their reports.
In fact, those who avoid requesting this information from verified credit report companies risk worsening their financial situations. If consumers ignore their reports, they are unlikely to improve their economic stability.
When individuals obtain their free yearly credit report, they are able to examine their situations and assess potential damage that has been done to their credit. However, consumers who avoid reviewing this information are unable to improve their financial circumstances.
Regardless of the credit histories, consumers should request their annual reports and review their situations. Borrowers with less than perfect credit histories should be especially sure to request these reports so they know what areas they need to improve in.