There are ads everywhere online for “free credit reports” and despite the bad reputation, these are not scams. In fact because of the The Fair Credit Reporting Act (FCRA) you are entitled to receive 1 free credit report once a year from each of the three credit report services.
That’s an Equifax free credit report, as well as one from Experian and TransUnion or trw free credit report bureaus. All thanks to the free credit report government deal with the three major credit reporting agencies.
What happens if you need more than one annual creditreport? Well then the credit reporting bureaus have the right to charge a modest fee (about $15) for a copy of your report.
Free Credit Reports vs. Credit Scores
The myth of the free credit score likely comes from the confusion over credit scores versus free credit reports. Credit repair services like to advertise free credit reports to people who are really looking for credit scoring systems information in an effort to try and upsell them on credit help, credit counseling agency fees or various identity theft report products.
Each of the three major credit reporting bureaus reports will contain a list of all the transactions logged against your account. However, your credit report will not include your credit score which is a complex calculated value based on many factors which are derived from the items and dates of the items included in your credit report.
Free Instant Credit Report, Now What?
Time spent understanding a credit report is well spent. Go through it and make sure items like student loan debt, home equity borrowing and nondischargeable debts are accurate and any accounts that are paid in full are removed.
From there you need to work on improving your free credit report: deal with your debt, get help from one of the credit counseling agencies or even obtain a secured credit card to rebuild your credit worthiness.
This process is commonly known as credit repair and involves a step by step process ranging from understanding credit reports and the credit scoring systems to aggressively taking care of errors and possibly even enlisting one of the credit repair services.
Free Credit Score?
Credit scores or FICO scores are not available for free. But the best place to obtain you FICO score or credit score is through the company that invented the system (Fair Isaac Company â€¦thus FICO).
At their official site MyFico.com, you can request a credit report check of the exact report, called a tri-merge credit score that mortgage brokers will use to evaluate your loan applications.
Free Credit Reporting
Free credit reports can be requested from each of the major bureaus once a year. It is a good idea to obtain and study an annual free credit report to look for anomalies and mistakes in your report. These can and do happen (the last statistic I saw was that up to 70% of credit reports contained errors). So do a free credit report check at least annually for each of the 3 credit reports.