A deluge of television and radio ads promoting free credit reports  have certainly caught the attention of many consumers. After all, no one would put so much money into an expensive advertising campaign unless it worked, right?

Take a closer look at what is being offered and you soon learn that there is a string attached to the so-called free offer. You will get your credit reports for free, but you’ll have to pay for a second service – credit monitoring – that you may not need.

How To Get Your Free Copies

Instead of paying for something that you don’t need, why not get copies of your report for free? As a result of an amendment to the Fair Credit Reporting Act in 2003, Congress authorized the Federal Trade Commission to require that copies of your credit report be made available to you for no charge. Previously, in order to obtain your copy, you would have had to pay a fee for each one. Beginning in September 2005, residents of all fifty states became eligible to get a free copy of their credit report from Experian, Trans Union, and Equifax once annually.

Why were the reports made available at no charge to consumers? Well, even though all three companies operate independently of the federal government, their combined strength carries so much weight in determining your credit standing that a decision was made that everyone should have the right to obtain their personal credit reports on demand. Moreover, since a substantial number of these reports have been determined to include errors, consumer advocates insisted that you shouldn’t have to pay to rectify someone else’s errors. Thusly, the Fair Credit Reporting Act as amended in 2003 became law.

Get It Online Or In Writing

There are several ways you can order your free credit reports, but there is only one web site that will give you your reports for free: www.annualcreditreport.com. Again, only this one site acts on behalf of Equifax, Experian, and Trans Union to give you your reports to you for free.

You can also call the following toll free number to order your free credit reports: 1-877-322-8228

If you wish, you can place your request in writing after downloading and filling out a form found online at http://www.ftc.gov/bcp/edu/resources/forms/requestformfinal.pdf. If you choose this method, you will need to mail the form to:

Annual Credit Report Request Service
P.O. Box 105281
Atlanta, GA 30348-5281

For more information about the Fair Credit Reporting Act and the Federal Trade Commission, please visit the following site: http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre34.shtm

When ordering your reports you can also ask for your FICO score. Unlike your free credit report, you will pay a small fee – usually $5 and $8 – to get your score. If you choose to find out your score you can use a credit card to pay for your order.

The three national credit reporting bureaus may also seek to sell other services to you while you are checking off the information for your free credit report. These services include alerts, but you probably don’t need them. If you select some of the other offers, you will be charged for those services, so be careful what you choose.

Resources

Check Your Credit

Federal Trade Commission

Financing Tips

Tags: credit score, Equifax, Experian, Federal Trade Commission, free credit report, Trans Union

Here is some food for thought: you’re planning to renovate your home or take out a loan to pay for a new car. You’ve done extensive research on what you want and, in the case of a home improvement project, you’ve chosen the contractor, drawn up plans, and priced those new kitchen cabinets and counter tops you want.

One thing remains undone, an important step that could scuttle your dreams: your credit could be trashed, thanks to the work of an identity thief or because of a mistake made by the credit bureau. Yes, you’ve done your homework but you forgot one key step: checking your credit reports to see if they are accurate and reflect current information.

Your credit report is a vital part of consumer lending and, thanks to an act of Congress, is free when ordered through Annual Credit Report, a website managed by the three primary credit reporting agencies, Experian, Expedia, and TransUnion. Once annually, you can get one copy each from the three agencies of your credit report for free and optionally pay the $4-8 fee to get your credit score. Yes, pay the money for your credit score because that is the number creditors use to determine if you qualify for a loan and at what rate.

Checking your credit reports regularly makes sense, but what about other services which keep tabs on you? Though credit reporting bureaus are the most important way to get “the goods” on you, there are some other organizations who keep tabs on you, namely:

Insurance — Your medical history or your homeowner’s policy could be information that insurers want. Several companies keep tabs on this stuff including MIB and Choice Trust.

Tenancy – If you’ve rented before and left your landlord high and dry, don’t think for a moment that this decision won’t come back to haunt you. SafeRent and ChoicePoint know what you did and they’re more than willing to share this information with a landlord, for a fee of course.

Job — Acxiom and ChoicePoint keep tabs of your employment history, but you could be aiding them with your online resume through Monster or CareerBuilder.

Banking — Have you written a hot check lately? Probably not, but opening up a checking account is serious business. That’s why TeleCheck, ChexSystems, and SCAN keep track of good and bad deposit information.

If a problem does come up,  the credit reporting bureau or other credit checker must allow you to address the mistake or correct a problem. Most of the companies I’ve mentioned will provide that information to you for free, but you have to ask in order to get it.

Don’t wait until after you set your home improvement or other consumer project in motion before checking your credit reports. To delay means you’ll really pay, but certainly not in a good way!

Tags: banking, credit history, credit score, employment, free credit report, insurance, tenancy

One of the keys to having a strong credit record is your credit score, the number the three major consumer credit reporting agencies develop to help lenders decide whether you will receive credit, for how long (your term), and the interest rate that you will pay. The higher your score, the more likely you’ll be approved for a loan and at a competitive rate.

Experian, TransUnion, and Equifax are the three private agencies who track your credit and each one “scores” you based on the financial information that they have about you. Thus, each one will likely return numbers that are different from the other two, but their scores should be in the same ballpark.

Your credit score is also called your FICO score which stands for Fair Isaac Corporation score, a formula developed by Fair Isaac and used by all three credit reporting agencies.

If you are looking to buy a home and are seeking to finance it for 30 years, taking out a $300,000 loan then the most recent FICO numbers would give you the following loan details:

These are national averages, so your loan will look slightly different where you live. As you can see, the $950 per month premium for the person with a score in the low 500s, would add more than $10,000 annually to the loan, that is if they can get approved in the first place.

So, what can you do to raise your score? It can’t be changed overnight, but if your score is too low you can do the following which should yield decent results within 3-4 months time:

Clean up your credit report — that’s right, if there are errors on your report your score could be artificially low. Start off by checking your report first for accuracy before proceeding.

Pay on time — late payments can weigh you down, therefore make sure that you pay every bill on time.

Pay down debt — you don’t have to pay off all of your debt, but if your percentage of debt as related to credit line is over 35%, then that will lower your score.

Clean up an old mess — that unpaid and uncollected money you owe from long ago could be biting you in the backside. Contact creditors and offer to pay at least a portion of what you owe to settle your debt once and for all.

As always, check your credit regularly by ordering a credit report and your credit scores to see where you stand. Obtaining both is a small investment which can pay near instant dividends.

Tags: credit report, credit score, Equifax, Experian, FICO, free credit report, TransUnion