Totally Free Credit Reports and How to Get Them
Free credit reports can now be easily requested and supplied by the three major credit reporting bureaus, TransUnion, Experian, and Equifax. As per the Fair Credit and Reporting Act (FCRA) these bureaus are required to annually give all citizens a free credit report when a request by the consumer is initiated. Credit reporting agencies are not required to send out these reports to you automatically, they must be contacted by you and receive a request.
These free credit reports can be applied for at different time intervals from the 3 different agencies. Using this method, you would receive a new report every 4 months from a separate bureau until the year resets the process over again. Requests can be made for free and for-purchase credit reports by contacting the bureau directly via telephone, website, or mail.
Video: What is the Fair Credit Reporting Act?
Importance of Credit Reports
Credit reports are an essential part of regulating your finances and affect every aspect of your financial dealings. These credit reports are based on factors like debts owed, debts cleared, payment history of accounts, length or duration of loans, number of loans taken, types of loans and other related elements.
Checking these reports often and diligently will enable the consumer to find errors and misinformation on the credit reports and make the necessary repairs. A misrepresented fact or error on your credit report can be fixed if it is found by you. This process is called a dispute and consists of the following process:
- Consumer checks their credit report and finds the error, typically these are misrepresented late or missed payments provided inaccurately from a lender.
- Consumer then locates irrefutable proof that the negative report was issued in error; these are typically canceled payment checks, receipts, payment books, etc.
- Consumer contacts bureau who has issued the credit report with the erroneous data. Requests a dispute for the item in question. Supplies the credit bureau via mail with copies of proving documents.
- Credit bureau initiates a credit dispute period. This period provides for 30 days for the responsible party who initiated the report, the lender or credit card issuer for example, to provide proof to contradict your receipt. If there is not sufficient proof to override your claim or the lender does not respond within 30 days, the bureau will remove the disputed item from your credit profile.
Video: How to Dispute a Credit Error
There are significant chances for errors to be made in your credit report by the very operators who prepare these reports electronically. It should also be noted that there is always error in data entry, credit mistakes will be erroneously be tied to the wrong consumer. It will happen, does happen and will continue to happen. What you must do as a consumer is diligently and frequently be on the lookout for these errors and fight to repair them. The creditors may be the one making the mistake, but if you do not address and repair it, you will be the one paying for that mistake.
Credit Reports and Credit Scores
Credit reports are the key factors which determine the credit scores. Credit scores are basically the numerical expressions which are computed on the basis of the credit reports themselves. Credit reports include the details about the payment history while the credit scores depict the same through numbers. By obtaining and checking their credit reports, debtors will have the ability to improve their reports and thus their credit scores in one shot by addressing errors and staying on top of their accounts.
Instant Improvement in Credit Scores
The correction of errors on credit reports will reflect immediately on credit scores. As the negative data is removed, the process by which FICO represents your score will change instantly. It is worth your time to get those reports cleaned up and accurate and start your credit score on the march up as soon as possible.