Free Annual Credit Report

If you have not already known, the FTC mandates that the 3 biggest credit bureaus (Experian, Transunion, Equifax) provide you a free credit report every year.  This credit report will report to you the history of your credit throughout the course of the given year.

Each of the three bureaus reports your credit differently with their given credit score.  You are rated based on your ability to pay your bills on time.  Whether or not you pay your bills on time or if your payment is delayed, your performance will be reflected upon your credit score.  The credit reports take into consideration not only your credit card purchases, but expenses such as your electric bill, water bill, telephone bill, and gas bills.  Other expenses you are rated on are your loans, mortgages and other bills.  Your failure to pay these bills on time will cause your credit score to go down, and ultimately making it harder for you to secure a loan in the future.

When applying for loans, the banks use your credit report to make a reasonable judgment on whether or not they should loan you money.  If your score is poor, the banks will have a bigger reason to provide you with a loan, but with a high interest rate.  Knowing you will most likely have trouble making your payments on time gives the banks the ability to take advantage of your poor spending habits.

The free annual credit report is a great way for you to take notice of identity theft as well.  If you know you are a responsible person and have made all of your credit transactions on time, then you know there shouldn’t be any problems with your free annual credit report.  Looking at a poor credit score would be warning signs that quite possibly you have been a victim of identity theft or maybe you have forgotten to make certain payments on one of your loans.

Without a free annual credit report, you would never know if you were failing to make your payments on time.  Failure to take notice of your credit report can truly cost you a lot of money down the line because of the high interest rates and late fees.  With excellent self-discipline and a little knowledge you will never have to worry about your credit score as long as you take advantage of your free annual credit report from the three big credit bureaus.