For a person who anticipates the need to obtain credit or loans of any kind, periodically checking his credit score is a smart thing to do. The easiest way for someone to check his own score is through the Annual Credit Report Request Service. Other ways exist, but this is the most reliable, and gives the most information. To stay informed and protected in between annual reports, many people choose to employ a credit monitoring service.
For creditors to determine whether and on what terms to give someone a loan, they must know a person’s credit score and perhaps even have an idea of the content of the person’s credit report. A score, also called a FICO® score, ranges from between 350 and 850. There are three credit bureaus which assign FICO® scores and maintain reports. A person can receive a free copy of all three of these reports on a yearly basis, in what is known as a credit file disclosure.
United States Federal law provides that every person can request a free credit file disclosure every 12 months. These requests can be made online, over the phone, or through the mail. It is important to keep in mind that these reports should be ordered only from an official source. For example, emails or pop-up ads on the Internet, which offer free reports, are usually a scam or other contrived means of getting personal information. Also, you should never give out a credit card number when requesting a free report.
There are two main reasons for checking your report. The first is to catch errors and identity theft early. If a fraudulent account has been opened in your name, you will be able to see it on the report. Alternately, if there is a mistake regarding account information, such as balance or credit limit, these mistakes can be fixed before having a negative impact. Another reason is that simple awareness of your credit rating can help avoid unpleasant surprises when it comes time to buy a house, or a car, or do anything else that depends on a good number.
In the event that you find an error in a report, the credit bureau needs to be made aware of the inaccuracy. It is best to do so in writing, by certified mail, supported by copies of any relevant documents. If this claim changes the person’s credit status, he will be entitled to another free report which reflects those changes. The creditor who gave the bureau the inaccurate information should also be made aware of it, so that errors in that company’s files may be rectified.
