Having a good credit rating has become incredibly important in the modern world. With a high credit score, you can apply for loans with better interest rates, premium credit cards, and low-interest mortgages. To check your credit history, you simply need to request a credit report from one of the three major credit bureaus.

The concept of credit and credit reports is quite complex, and several factors go into your credit report. This includes outstanding loans, paid loans, credit card accounts, and even your medical history. Companies that prepare credit reports and track consumer credit history are called Consumer Reporting Agencies, or credit bureaus. These bureaus sell credit reports to businesses and lenders, and they also provide them to consumers themselves. You can check your credit report free once a year from the major credit bureaus; Equifax, Trans Union, and Experian. If you utilize each bureau, that means you can request up to three free reports a year. Once you go beyond three, or want to use a credit bureau twice, there is a fee (usually only about nine dollars).

The benefits of reading your credit report are numerous and should be taken advantage of by everyone. On the report, you can see nearly everything about your financial activities. The report lists your bank accounts, accounts with various companies, credit cards, lender accounts, and the names of people who obtained your report in the past year.

Why should you check your credit report? For one, it is good to know where you stand before you try to get a mortgage, new car, or other large purchase. A more important reason to check is to find errors. Keep in mind, this report determines whether or not you can get a house, so it is critical that you know all about it. Humans prepare credit reports, and what inherent quality do people have, human error. Therefore, it is quite likely that a part of the report could be fallacious. It is up to you to correct any mistakes, so make sure to order your report at least three times a year. To correct any mistake, simply call the Consumer Reporting Agency and notify them of the error.

Identity theft has become a major problem lately. Although most people do not think it will happen to them, it most certainly can. By occasionally checking your credit report, you can easily find anything suspicious, and then immediately take appropriate action to rectify the situation. Otherwise, you may not find out for months that you have been a victim, and by that time, you already have a pile of debts to deal with. If you discover you have been a victim of identity theft, you can freeze your reports with all of the major credit bureaus, which protects you from any further damage.

Credit score is the single most important piece of information on the credit report. That one number affects nearly your whole financial life. The way credit bureaus arrive at that number is relatively straightforward. They factor in your payment history, outstanding debt, types of credit you have, the length of time you have had credit, and more. Although each credit bureau has their own specific system, the number usually ranges between 300 and 900.

To improve your credit score, there are many measures you can take. The most important is to pay your bills on time. If you do this one thing, over time, eventually you will achieve a high score. You can also reduce your balances on credit cards and spread your debt around to several different cards. As long as you stick to a solid financial plan, your credit score is guaranteed to consistently rise.

A credit report generated by three major credit bureaus. The report has information about your employment, the way you have paid your bills and details about major financial transactions in which you were involved. It also includes details about any loans or payments on which you have defaulted and also if you were arrested or have filed for bankruptcy in the last decade. In short a credit report is what determines your credit worthiness to businesses and financial organizations across the world. The credit bureaus sell your information to major banks and financial agencies across the world.

The Major Credit Bureaus

There are three major bureaus. TransUnion, Equifax, and Experian. There are many small time bureaus as well but they are affiliated to one of these three majors in the field.

A Clean and Error Free Credit Report

It is extremely important to have an accurate, clean and error free credit report. If you have applied for a loan and have been denied it due to a bad credit report, then the lender will give you the name and telephone number of the credit agency that gave the report. If you contact them in writing within 60 days of being denied, then you can get a free copy of your credit report mailed to you. Even otherwise, you have a right to receive at least once copy of your credit report every year. Even if you wish to review your credit report at any point of time, you simply need to get in touch with one of these credit report agencies.

If There Are Errors

If there are any errors or discrepancies in your credit report, then you need to once again let them know in writing about the information that you believe is incorrect. The letter should have your complete name and address, each part of the report which you are willing to dispute and copies of documents which support your claims. It would be better if you keep a copy of the letter with yourself as well.

Then it is up to the agency to review the information which you are disputing. They will then reinvestigate those parts and if there are any errors correct it. For example, if there is an account which you cannot identify and have not opened, and then you need to report it. It may even be a case of fraud. It is also called as identity theft and millions of people are falling prey to it. Hence it is always recommended that you keep checking your credit score.

Online Credit Report

An online credit report is the latest addition to the list of services that credit bureaus provide. When you sign up with these credit bureaus for their services, you are allotted a unique log in id with which you can easily access credit reports from all the leading agencies. It includes all reports from all three major credit bureaus, viz. Equifax, Experian and TransUnion. This is an excellent service because it reduces the time factor by a huge margin. Earlier, it took days for the credit report to reach you after you wrote or got in touch with the agencies. Now, thanks to the online credit report, all that you have to do is click on the website and log in. Viola! You have access to all the information that you need.

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