Benefits of Free Credit Reports
What does your credit report say about
you? If you don't know, take advantage of free credit
reports and get up to speed fast.
Why bother? Hundreds to thousands of
dollars, that's why. The rates and fees you get charged
by mortgage, auto, credit card and even insurance
companies depends mostly on your
fico credit score, which is calculated from the
report data. A percentage point higher interest rate on
a 30-year loan adds up to many thousands of dollars,
spiking your monthly payments. With better rates, you
can qualify for more home or keep extra cash in your
pocket every month.
Prevent these credit problems with
free credit reports:
- Catch and correct errors that depress your score
artificially.
- Discover and prevent expensive fraud or
identity theft.
- Optimize your credit report &
Fico score.
- Prepare in advance for major credit purchases or
loans…
…all at no cost. Well, at least during
the free trial period, in the case of credit monitoring
services. (See
free online
credit report.) Most vendors deliver them online
instantly; in less than one minute you can get started.
You can often preview the credit report format on the
vendor's website to know whether it's easy to read. And,
if you find any incorrect information looking like
fraud, you'll already be signed up for the ongoing
monitoring service, a valuable ally in the fight against
fraud.
These types of free credit reports aren't always a
perfect choice, but they have been one of the only
choices. One drawback is that to get a free report from
each credit bureau (Equifax, Experian or TransUnion),
you'll have to search for three different vendors, as
each free report is pulled from a single bureau. It's
important to check
credit reports from
all three bureaus, as the data is often different. Also,
because this source of free credit reports is connected
to subscription monitoring services, you'll get charged
a monthly or quarterly fee if you don't cancel before
the trial period ends. That's one reason why credit
cards are required.
Last, these and other free credit reports usually omit
credit scores. Credit scores can be thought of as the
"net result" of all the information on the report. It's
the number lenders & their computer systems look at to
decide if you're creditworthy. You should ideally
benchmark your score at a point in time and measure your
activity & credit decisions against it regularly.
Latest news on free credit
reports-available on request
New federal legislation lets you
obtain a
free credit report without a credit card from each
bureau once per year simply for asking. Starting
December 1, 2004 and phasing in nationwide by September
2005, this service will make it vastly easier to keep
your credit profiles healthy at no cost, though again,
scores are not included. |
