Finding Out About Your Credit Rating

I’m thinking of a number between 0 and 800, do you know what it is? It’s my credit score and it happens to be 720. Many people have seen this recent commercial about the importance of knowing your credit score. Internet pop up ads offer free or low cost credit reports for those who reply to their advertising. Clearly with such a heavy advertising campaign underway, there must be some importance to knowing what is contained in your credit report. But how does one go about obtaining his own credit report and what credit services are reliable for obtaining this report?

Your credit rating is a determination of your ability to repay a loan. Credit bureaus keep track of your spending, saving and credit patterns. These statistics are used to generate a three digit credit score, which is an index of your credit worthiness. Your credit report contains several important items of which you should be aware. Any outstanding loans or debts are contained in your credit report. Even debts that you are not aware of or may have forgotten about can still be hurting your credit. Often such matters can be cleared up easily with a phone call and a payment plan, but you can’t fix what you are not aware of. In addition to outstanding debts, credit reports also indicate how much credit you have used, how much of your outstanding loans you have paid, the timeliness of your payments and your total assets, liabilities and owner’s equity.

Credit institutions use credit reports in a variety of ways. Since a credit report is a barometer of your financial tendencies, resources and liabilities, most lending institutions use your credit report in making the decision of whether or not to grant you a loan. A poor credit score can keep your from getting a loan or, even if you do get loan, you might face an exorbitant interest rate because of your bad credit. Landlords might use your credit report in deciding whether or not to offer you a lease and in deciding how much of a security deposit that they require from you. Even employers might also use your credit report in hiring decisions.

Thus, since your credit report contains so much important information, you should obtain a copy of this report. There are three main credit bureaus: Experian, Equifax and TransUnion are the three main consumer credit reporting agencies in the United States. In accordance with the Fair Credit Reporting Act, each of the three main credit report agencies will give you a free credit report once every twelve months. You can visit the website annualcreditreport.com or call 1-877-322-8228 to obtain your credit report from the big three credit reporting agencies. Many imposter websites claim to offer free credit reports, but really are only trying to confuse you into visiting their sites to sell you something. Other sites will offer you free access to your credit report for a trail period after which time you have to pay for any further membership. Of course in such cases, your membership will automatically renew, charging your credit card in the process. These scams should not deter your from getting your credit report, however. Knowing what your problem areas are is your first step toward rehabilitating your credit.

Once you obtain your report, you can figure out where you stand with your outstanding debts. This can help you decide if it will be a wise decision to sign up for additional credit cards or loans.