Free Annual Credit Reports Help You Repair Your Credit!

A free credit report can be the start of a secure financial future for you. If you've been wondering how you rate, how likely you will be to get a mortgage in the future at a good rate, and whether you'll qualify for the best credit card rates offered, you need to get ahold of your credit report and make sure it reports your history accurately.

What's all the fuss about credit reports? Well, the information contained inside one can cause you to be turned down for a job, for a mortgage, even for an apartment rental. So it behooves you to get your free annual credit reports and start the task of credit repair.

What is a Credit Report?

Anytime you borrow money from a company, your record of re-payment is likely to become public record. When someone is considering lending you money, or giving you a credit line, it's likely that they'll look inside your report to see how you stack up. Inside the report will be the following main sections:

• your payment history -- do you pay your bills on time, or do you occasionally pay late? Are there any bankruptcies on your record? Have any of your accounts gone into collection? This factor accounts for approximately 35% of your credit score.
• amount you owe -- there will be a record of all your loans and credit lines on your credit cards, as well as the outstanding balances on your credit cards. If you have plenty of available credit, that's good, if you're maxed out, that's not good. This factor is worth 30%.
• length of credit history -- how long have you had credit? Longer is better. This is worth 15% of your credit score.
• type of credit -- if you have secured loans (like real estage or auto loans), as well as unsecured loans (like credit cards), that can give you a higher score, depending on the percentage of secured loans vs. unsecured loans. This ratio accounts for 10% of your credit score.
• number of recent inquiries -- every time someone accesses your report (besides yourself), an entry is made indicating the inquiry. If there are a lot of recent inquiries, that could mean that you're having a problem, seeking out lots of loans, and will lower your credit score. This will also account for 10% of your score.

What Else Will Lenders Look At Besides the Credit Report?

Many lenders will simply look at your credit score when deciding whether to give you credit. Others will look at other factors, such as income, employment history, length of your current residence, marital status, among others.

Am I Eligible For A Free Credit Report?

It's important to monitor your credit history, and the best way to do that is to request a free credit report. You qualify for a free credit report in the following situations:

• you're entitled to a copy of your credit report from each of the three credit reporting agencies annually.
• you're entitled to a free copy of your credit report if you've been turned down for credit in the last 60 days because of information contained in a specific credit report.
• you're entitled to a free copy of your credit report if you're unemployed and will be seeking employment within 60 days.
• you're entitled to a free credit report if you're on welfare.
• you're entitled to free credit reports if you've been the victim of identity theft or some other fraud that will affect your report.

Who Do I Contact to Obtain my Free Annual Credit Reports?

1. For your free annual credit report, visit www.annualcreditreport.com. Different states have different dates of eligibility, check to see when you'll be eligible to get your free report under this plan.

2. Otherwise, you should contact one or more of the following credit reporting agencies for your free credit report:

• Equifax, phone 800-685-1111 or visit their web site at www.equifax.com
  
• Experian, phone 888-EXPERIAN (888-397-3742) or visit their web site at www.experian.com
  
• Trans Union, phone 800-916-8800 or visit their web site at www.transunion.com

What If There's A Mistake On My Report?

Chances are, there is a mistake on one or more of your credit reports. That's why it's important to get your free report whenever you're eligible, because errors can be hazardous to your financial health.

Once your receive your report, look at it carefully. If you see an error, contact the applicable credit reporting agency in writing, and give them evidence of the error(s). When they send you the report, there will be information as to what to do in case of an error.

Should I Allow Someone Else to Correct My Credit Report?

Correcting mistakes on your credit report is generally known as "credit repair". Some credit repair companies have given the industry a bad name because they do shady things like dispute correct information in an attempt to at least temporarily get the information taken off the report. However, if the information is correct, it will generally come right back onto your report soon enough.

The person most familiar with your credit situation is yourself. Most people are able to correct their own reports. Look for incorrect information, especially in the more important categories. If there are mistakes, dispute them. If you are paying back lenders that do not show on your report, go to those lenders and see if they are willing to send in a report.

However, if you prefer to have someone else help you correct your report, I suggest you research your options before paying someone to help you. We've set up a separate site, Credit Repair and Debt Consolidation, which has a ton of information about the subject. We have nothing to sell you, we are only an information source.