Why Your Credit Report Matters And How To Check It For Free

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“If you have a credit score of 600 or above, you’re approved!”

This sounds exactly like the guy cheesy car dealership ads that appear way to often between my favorite television shows. And they give me the creeps for SEVERAL REASONS!

First and foremost, they uplift the assertion that your credit score is a complete reflection of how you handle debt. If your score is high, you are responsible…and vice-versa. This assertion is valid, but many fail to realize that the credit score is not always the only component used by decision-makers to gauge the level of risk that they pose to the potential lender, provider or employer.

What Your Credit Score Really Means

Your credit score is merely a representation of what’s in the actual report. And this is EXACTLY why you should focus on the inputs (credit activity) and not the outputs (credit scores)! Typically, your score will vary by bureau. Since this figure cannot be disputed, the only option you have to ensure its accuracy is to review your credit report for errors.

How Your Credit Report Can Have a Major Impact on Your Livelihood

In most instances, employers or insurance providers seeking access to your credit file are not concerned with your actual score. Instead, they want to examine the actual credit report to analyze spending patterns and payment trends. Therefore, a decent score may negatively impact you if inaccuracies exist within the report that raise red flags, such as high usage ratios, bankruptcies or charge-offs.

Identity Theft

Some believe that once you are debt free and never need to finance another item, it is not necessary to keep up with your credit profile. I completely disagree with this stance for many reasons; the main one being that fraudulent activity appearing in your credit report can be an indicator that your identity has been compromised in many other ways.

How to Check Your Credit Report for Free

Listed below are the steps you can take to retrieve your credit report for free:

1. Visit www.annualcreditreport.com.

2. Select your state of residency from the drop-down box.

3. Enter the personal info requested (i.e. name, date of birth, social security number, address).

4. Select the reporting bureau.
***(Tip: Only select one every 4 months so that you can view your report three times per year.)

5. Answer the verification questions.Once you have your credit report in hand, review it and note any inaccuracies. If there are any major discrepancies, be sure to file a formal dispute through the bureau(s). The credit bureau is obligated to respond within 30 days of the day they receive the correspondence.

Knowledge is power so don’t be afraid to know where you stand in the world of credit. It’s never too late to start making improvements to your financial situation.

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