Free Annual Credit Report

A recent change to the FCRA says that the three consumer reporting agencies are required to provide you with a copy of your free annual credit report once every year.

However, one thing that the FCRA does not provide is a copy of your credit score, or FICO score, which is what major lenders and banks look at when evaluating your credit worthiness. The government’s site at annualcreditreport.com allows you to purchase your FICO score from each of the three credit reporting agencies through them or by contacting them individually. Either way you are paying a fee in order to obtain each reporting agency’s valuation of your credit score.

What the website annualcreditreport.com does not let you know is that you are allowed to get a copy of your free annual credit score from each of the three agencies when you order your free credit report through them. You get this by ordering one of the programs that they offer such as an identity theft or credit monitoring service.

If you don’t like the service that you apply for when getting your free annual credit score, you can simply cancel within the 30 day trial period that they provide. Thus you are essentially getting your credit score, something that the annualcreditreport site charges you for, absolutely free! As long as you cancel the trial service within the 30 day period, you will not be charged any fees.

This is a free anual credit report consisting of private information about your residence, the method you use to pay your bills, and other issues like if you’ve been bankrupt, arrested etc. This report is provided by the consumer reporting companies. In the United States TransUnion, Equifax, and Experian are the three major companies providing this report yearly. They give out these information to other companies in need of it, so as to process your employment, credit, insurance, loan etc.

There is always a need to order for your free anual credit report from the three nationwide companies because the facts there will help you to know what you’ll have to pay if you request for a loan. It is also important to request for your credit report so that you can monitor your credit account to prevent theft.

You can order your free anual report by visiting the site that has been provided by the nationwide consumer companies to be used for this process www.annualcreditreport.com. Fill the request form and your report will be sent to you. You are only permitted to request for one report each year from each of the three nationwide consumer companies this is in the Fair and Accurate Credit Transactions law. This means that you can get three reports from the three companies each year.

Fill the request at the site above provided necessary details about yourself like your name, address, sex, date of birth, SSN etc. You will be asked a private question about yourself as a security measure to ensure they are dealing with the right person. After this your free annual credit report will be sent to you. The online application is always the fastest since the report is given to you immediately, but every other method takes about fifteen days since your data will be processed and delivered to you. The whole process can take a longer time if they need some more clarification about your identity. With this process you can easily get your free annual credit report. There are other reasons that can qualify you for a report, like if your loan, credit or employment application is rejected. Apart from these, if you need an extra copy annually, you can buy the extra credit report copy from any of the three nationwide consumer companies.

Consumers in the United States have had the right to obtain a free copy of their annual credit report for the past couple of years. The FCRA, Fair Credit Reporting Act, entitles you to query either Experian, Equifax, Transunion or a combination of all three for a copy of your free annual credit report once a year.

Consumers can obtain a copy of their credit report online for free at Free Annual Credit Report. Additionally, there is also a free toll number, 1-877-322-8228 where US citizens can request their annual credit report. A report can also be obtained by filling out the Request Form and posting it to Annual Credit Report Request Service, PO Box 105281, Atlanta, GA 30348-5281. Online, the service is instant, but security questions will be asked to verify identity. By telephone and post, it takes about 15 days for a credit report to arrive, but it may take longer if the agency needs to verify an identity.

It is important to frequently check your free credit report using one of the above methods in order to ensure that your financial history is free of any mistakes or erroneous data. A single negative mark on your credit report history can mean the difference between qualifying for a loan and being turned down.

Additionally, consumers can get a free credit report if they have been turned down for credit, insurance or employment and they apply within 60 days of receiving notice from the company involved. The unemployed who are looking for work, those on welfare and people whose reports are inaccurate, because of fraud, can all get a free credit check.

Free Annual Credit Report

A recent change to the federal Fair Credit Reporting Act now says that each of the consumer credit reporting companies (Equifax, Transunion and Experian) are required to provide you with a free copy of your Free Annual Credit Report. Consumers are eligible to obtain their free credit report once every 12 months using the governments free credit report site, or more if they use a third party service to make the request for them.

The Fair Credit Reporting Act requires that Equifax, Transunion and Experian all provide accuracy and privacy of consumer information when you use their websites online to obtain your yearly credit report free. Additionally, the Federal Trade Commission, (the US consumer protection agency), oversees and enforces the FCRA with respect to consumer reporting companies.

When you make a request to access your Annual Free Credit Report you are allowed to get the report from either Equifax, Transunion or Experian or any combination of the three. A lot of people choose to request it from only one free credit reporting agency at a time so that they can request additional checks throughout the year. If you are access your free credit report prior to applying for a loan, you should investigate to see which agency the loan office checks and get your credit report from that company. This will ensure that you have the same information that your lenders are seeing.

The Federal Trade Commission (FT), the nation’s consumer protection agency, enforces the FCRA with respect to consumer reporting companies. You may order one, two, or all three reports at the same time, or you may stagger requests. It’s your choice.

Getting access to your free annual credit report is a simple 5 minute process and can be done so right now at Free Annual Credit Report.

FreeCreditReport.com has launched a series of new commercials aimed at enlightening consumers on the importance of acquiring their Free Annual Credit Report. These ads show a single talking about identity theft, bad credit and some of the other negative aspects of being uninformed about what is on your free credit report.

One of the FreeCreditReport commercials can be seen on YouTube at:

While the Free Credit Report jingle is fairly comical and catchy, the importance of it lies in its message: you need to check your free credit report annually in order to stay informed and away of your financial standing.

There are tons of companies out there that say that they can completely wipe out your debt and fix your free annual credit report and repair your negative credit history. While, challenging your credit report is legal, creating a brand-new credit report is not and you should pay attention to any company that says that they can do this for you. Despite that fact, there are new scam artists that are saying that they can create a new credit report and history for you in 30 days. Do not fall victim to these statements as they against the law and can actually hurt your free annual credit report as well..

These ‘credit repair’ companies make their profit by selling info on how consumers can replace federal employee id numbers (EINs) or taxpayer identification numbers for their own social security number and use this to build up a new credit report history. These companies call this process file segregation and claim that it is a legal way of restoring your free credit report. However, anyone that knows the knows that using a false id number to apply for credit is a felony and can face jail time for using this in attempts to repair their credit.

Another practice that these credit repair companies may try is to instruct consumers to use a different first or last name to apply for a driver’s license. This, again, is illegal and can put the person performing the act behind bars.

While it is acceptable that a consumer would want to repair their poor credit history and create a new credit file, people should exercise caution when approaching companies that advertise a magic credit fix. As the saying goes, if it sounds too good to be true, then it is (certainly in the world of free credit reports and credit repair). Falsifying any information to correct your negative credit history is a felony and should be avoided, period.

Each and everyone keeps a record of how much money is checking into their bank amount and how much money is flowing out. What most people do is keep a running tally at the back of their cheque book and then just balance it out with the statement sent by the bank towards the end of each month. Agreed, it is extremely important to know the balance amount left in your bank account while writing out cheques, but it is equally important to know how credit worthy you are. A credit report depicts the credit worthiness you hold.

While some people charge money for drafting out a credit report for you, there are ways to obtain a free credit report too. There are many factors involved that determine your credit score, for instance, some factors involved are: Bill paying history, the number of credit accounts owned by you, late payments ( if any ), collection actions and outstanding unpaid debt. Upon compiling all the necessary information, statisticians compare your information with that of many other consumers. Upon comparing, you are given points for each factor of your financial history that shows you to be a good credit risk. The sum total of all points accumulated are then added up to show you your credit score.

A Credit Report shows how worthy you have been. In layman’s language, a credit report is a tracking of all your credit payments and purchases compiled by any credit bureau and offered to any agency or individual that is trying to determine whether or not your are credit worthy enough to loan you money or invest in your ventures. This report enlists each and every account you have in your name, irrespective of the debit / credit / zero balance, all accounts are potrayed on this report. Any information on this report generally stays on it for upto 7 to 10 years.

Each and everyone should be aware of their credit score and must have a copy of their credit report with them.
If you are preparing to apply for a loan, may it be a home loan / a car loan / a commercial loan, whatever it may be, a loan is a loan, and the lender would need to view your credit report before even thinking of lending you money. More important, you yourself should be aware of your credit score before seeking a loan, so you know whether your loan will or will not be approved. You should always go through your credit report before handing it over to a lender, this is because if you notice some inaccuracy in it, you will have a chance to fix it so it won’t harm the chances of you getting a loan. Having your credit report in hand also gives you a chance to close any old accounts that you no longer use. Having many open accounts can influence your credit score and worthiness. Hence, it is always advisable to atleast get one free annual credit report, if not a paid one.

When you apply for credit, creditors use two primary methods to evaluate your request, especially when viewing your free annual credit report. What most credit lenders do is:

• Weigh your three “Cs”—capacity, collateral and character, and
• Create a “risk score” based on the information in your free credit report.

What are the Three ‘Cs’ of Credit Risk Rating

A creditor needs information to determine the likelihood that you will repay a loan or pay charges you incur on a line of revolving credit. This is done by evaluating the three “Cs.”

Capacity. This refers to the amount of debts you can realistically pay given your income. Creditors look at how long you’ve been on your job, your income level and the likelihood that it will increase over time. They also look to see that you’re in a stable job or at least a stable job industry. It’s important when you fill out a credit application to make your job sound stable, high-level and even “professional.” Are you a secretary or are you an executive secretary or the office manager? Finally, creditors examine your existing credit relationships, such as credit cards, bank loans and mortgages. They want to know your credit limits (you may be denied additional credit if you already
have a lot of open credit lines), your current credit report balances, how long you’ve had each account and your payment history—whether you pay late or on time.

Collateral. Creditors like to see that you have assets that they can take from you if you don’t pay your debt. Owning a home or liquid assets such as a mutual fund may offer considerable comfort to a creditor reviewing an application. This is especially true if your credit report has negative notations in it, such as late payments.

Character. Creditors develop a feeling of your financial character through objective factors that show stability. These include the length of your residency, the length of your employment, whether you rent or own your home (you’re more likely to stay put if you own) and whether you have checking and savings accounts.

These 3 basic principles are essentially what loan officers and creditors are looking for when they run a credit check on your and view your credit report. It is important that you have a good grasp on where you stand financial: this is where your free annual credit report comes in. Make sure you know what your current credit rating and risk score is so you will know what the loan officers see when they evaluate you.

While browsing up on some of the latest posts over the Get Rich Slowly blog, I came across this post where JD (the blog’s author) talks about a recent theft of his mail and possible identity theft concerns.

Some of JD’s suggestions with dealing with Identity Theft include The 3 Ds:

Deter
The first step is to deter identity thieves by safeguarding your information.

…

Detect
Detect suspicious activity by routinely monitoring your financial accounts and billing statements. Be alert to signs that require immediate attention.

…

Regularly inspect your credit report. Credit reports contain information about you, including what accounts you have and your bill paying history.

The law requires each of the three major nationwide consumer reporting companies — Equifax, Experian, and TransUnion — to give you a free copy of your credit report every year. But you have to ask for it.

Defend
If you suspect that you may have been (or may become) a victim of identity theft, you can file a “fraud alert” on your credit reports.

Placing a fraud alert entitles you to free copies of your credit reports. Look for inquiries from companies you haven’t contacted, accounts you didn’t open, and debts on your accounts that you can’t explain.

Read the Rest of JD’s Article Here

This just goes to show you that Identity Theft can happen to anyone, even those who are knowledgeable about it and the ways to stop identity theft.

If you are worried about becoming a victim of Identity Theft yourself, be sure to get a copy of your free annual credit report to ensure that all of your information is accurate and free of errors.

Does Canceling a Credit Card Affect my Credit Score?

Creditors frown on applicants who have a lot of open credit. They can sometimes cause your credit score to lower if you have too many open lines of credit. So keeping many cards may mean that you’ll be turned down for other credit—perhaps credit you really need. And if your credit applications are turned down, your file will contain inquiries from the companies that rejected you. Your credit file will look like you were desperately trying to get credit, something creditors never like to see.

If you want to close some accounts, here are some rules to follow:

• Close accounts you don’t need. You can close an account even if you haven’t paid off the balance. The card issuer will close your account, cancel your privileges and send you monthly statements until you pay off your balance. Or contact the bank whose card you are keeping and ask it to transfer your remaining balance on the account you are closing to the account you are keeping.
• Close accounts on which you are delinquent — otherwise the credit card issuer may close them for you. If you’re delinquent on all your accounts, keep open the most current account.
• If you pay your bill in full each month—that is, you don’t carry a balance—close the accounts with the highest annual fees. Make sure that the accounts you keep open have a
  grace period—a 20-25 day period each month in which you can pay off your bill and not incur any interest.

• If you carry a balance, close the accounts with the highest interest rates and shortest grace periods. Also, read your contract to understand the credit card company’s billing practice. Interest may be calculated on the previous two months’ balance, the average daily balance for the month or your balance at the end of the billing cycle. Keep the cards that charge interest on the balance at the end of the billing cycle.

How to Cancel a Credit Card

If you want to close a credit card account, make sure you do it the right way.

• Write a letter to the company and request a “hard close.” If you don’t do this, the company may give you a “soft close,” which means new charges can go through, even though you asked that the account be closed. With a soft close, you are susceptible to credit card fraud.
• Also request, in writing, that the credit card company report to the credit bureaus that your account was “closed by consumer request.” Accounts that are erroneously reported as “closed by creditor” will hurt your credit rating.
• After 30 days, check your credit report to ensure that it reflects that the account in question was “closed by consumer request.”