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Introduction

You are entitled to see a free credit report on your finances every 12 months.

If you’re not already aware – you are entitled to an annual free credit report. There are many reasons why you might want to have a free credit report on your finances, which we’ll mention here but expand on in other articles in this website – dedicated to helping you with your finances. However, to start with you need to know where to look, or ask, for your free credit report.

Where do you get a free credit report from?

It’s easy to find free credit reports online.

Regardless of whether you might deal with a well known national or even international company for your finances; or even a local company only known in the area where you live – there are some specialist finance companies that collect data regarding all of our financial transactions and are subsequently able to produce your credit report. Two companies that you often see advertising free credit reports are Experian and Equifax. However, there are many other companies that can provide you with a credit report, even if they in turn then ask a company like Experian or Equifax to prepare the report on their behalf. Of course the easiest way to get a free credit report is over the internet; simply by entering the term “credit report” into any search engine – you’ll see lots of websites you can visit to get a credit report. Remember, of course, that you want a free credit report. Most of the websites suggested by the search engine will more than likely offer you a free credit report. In the unlikely event that they don’t offer free credit reports, simply change what you ask the search engine request to find, to something like “free credit report”.

How many free credit reports can I have?

The simple rule here is that you are entitled, by law, to a free credit report every year. However, that’s not to say you can only get one free credit report a year! You can approach each of the companies offering free credit reports once in any 12 month (1 year) period. So, for example you could ask Experian for a free credit report in March and Equifax for one in September. You’ll have two free credit reports; but you’ll get them by asking two different companies for their free credit report on your finances – so, you’ve only asked each company once within the 12 month (1 year) period. We’ll discuss in another article why it might be useful to have more than one free credit report a year.

What will my free credit report tell me?

Read your free credit report carefully to see exactly what it’s telling you!

Your free credit report will contain a lot of information that you should find useful to help you plan and manage your finances. However, the bottom line in your free credit report is that it tells you how credit worthy you are. This will, of course include things like information from any bank(s) that you have accounts with; saying if you’re the sort of customer who is always in credit, or do you often go over-drawn etc. It will also list all the other companies you have financial dealings with; such as credit card and loans companies. This may well turn out to be the crucial information in your credit report. The credit report will contain information about loans you’ve had in the past and any current loans you have. You’ll see a summary of how well you did with the loan re-payments. Did you repay it ahead of time? Did you meet all the repayments on time? Did you miss any payments? Did you default on the loan? Of course this means that some credit reports can contain an awful lot of information and be quite complicated to understand. To get around this problem and provide a very simple summary – everyone’s free credit report will also generate a credit score.

Free credit reports and FICO credit scores.

Having all the information about your financial dealings and loans history is all well and good – but if you’ve had a lot of complex loans it can take some understanding. To make everyone’s credit reports simpler to understand – and basically to get to the point quickly; the information in your credit report is used to calculate a thing called your FICO score. The FICO score system takes its name from the Fair Isaac COrporation – that first devised a system for determining credit scores. There are other statistical models that produce credit scores – but the FICO method is the one most commonly used in the USA. It is your FICO score that determines your credit worthiness and, obviously, reflects how well you have managed your finances in the past – keeping in credit with your bank, paying off loans promptly etc.

Understanding your FICO score.

Got a poor credit report? Time to sort out your finances!

FICO scores are reported numerically and for most people their FICO score will fall in the range 300 to 800. Basically the higher your FICO score the better. So, someone with a FICO score of 800 or more will, typically, have kept themselves in credit and paid off loans quickly and fully. As a rough guideline, anyone with a FICO score of 600 or more shouldn’t have a problem raising a new loan or getting credit. However, if your FICO score is below 600 then you might experience difficulty getting new loans and credit or, for people with extremely low FICO scores – you could even be denied loans and credit. We’ll look more closely at how issues to do with your FICO score and getting credit or loans works in another article. For the time being – if you do have a low credit score, then it’s a wake up call to start getting your finances in order!

Correcting errors in your free credit report.

An important point here is that the credit report might contain information about you which is inaccurate and could be affecting your financial status and credit score. Without having your credit report you might never know that there is some incorrect information being held about you. It just could be that this incorrect information might be preventing you from completing a financial transaction like taking out a loan. Having found out about this incorrect information you can contact the finance company concerned and insist that they correct their records. Yes – you can insist that they correct any inaccuracies; and they are obliged by law to make those corrections.

Check your free credit report carefully!

You could be in for a shock with your FICO credit score.

This might sound a rather silly point to make, but especially if your credit report is a long and complicated one. But, do take the time to read it fully; and re-read it if necessary until you fully understand everything it’s saying about your finances. If you don’t read it and check it carefully then you won’t spot any errors which could mean that you have an incorrect credit score – that could in the long run cost you money when you next want to take out a loan or get some credit.

Free credit reports and identity theft.

If someone steals your identity they could have loans and credit crads in your name!

You’ve probably seen on TV the growing threat from identity theft; one easy way to check if anyone is stealing your identity is by reading your free credit report carefully. If someone steals your identity – they’re almost certainly going to use it to make money from it. This is why you must read your credit report carefully. Check and double-check that you took out a loan or that you hold a bank account etc. If you spot anything that you’re not responsible for – report it immediately to the credit reporting company and insist that they investigate the matter and stop your identity theft. It might be a perfectly innocent mistake – or it could be something far more sinister!