What's the deal on free credit reports?
In December 2003, President Bush signed into law the Fair and Accurate Credit Transactions Act (FACT Act), which gives every consumer the right to receive a copy of their credit report free of charge once a year. The free credit report access was rolled out from the west coast to the east coast, and as of September 1, 2005 every United States citizen is now able to obtain a free credit report.
What is a credit report?
A credit report provides you with all of the information in your credit file maintained by consumer reporting companies that could be provided by them in a consumer report about you to a third party, such as a lender. This information includes mortgage, credit card and loan balances, along with your payment history. A credit report also includes a record of everyone who has received a consumer report about you within a certain period of time.
You can request your free credit report through the website shown below, by phone or by mail. If you request your annual credit report by phone or mail, it will be mailed within 15 days. However, you can receive a report immediately online. Click on this link to find information on how to request a free annual credit report online, by phone or mail.
https://www.annualcreditreport.com/cra/index.jsp
Credit Report vs. Credit Score
Don't confuse your credit report with your credit score. A credit score (sometimes called a FICO score) is simply a number ranging from 375 to 900, which is derived from the many types of information in a credit file. A credit score is used by a lender to help determine whether a person qualifies for a particular credit card, loan, or service.
Most credit scores estimate the risk a company incurs by lending a person money or providing them with a service –– specifically, the likelihood that the person will make payments on time in the next two to three years. Generally, the higher the score, the less risk the person represents.
Your credit score may be negatively affected if:
... you've recently paid a bill more than 30 days late
... you've had an account referred to collections
... you have declared bankruptcy
... the amount you owe on an account is close to the credit limit
... you've applied for new credit recently
... you have too many credit card accounts
... you have loans from finance companies (not a bank or mortgage lender)
Only time, and avoiding the things in the list above, will cause your credit score to increase.
Although you are entitled to one free credit report each year, you will have to pay a modest fee to obtain your credit score. Click the link below for more information on how credit scores are calculated.
http://www.ftc.gov/bcp/conline/pubs/credit/scoring.htm