Free Credit Reports are the law thanks to an amendment to the federal Fair Credit Reporting Act (FCRA) that requires each of the nationwide consumer reporting companies to provide you with a free copy of your credit report, at your request, once every 12 months. The FCRA promotes the accuracy and privacy of information in the files of the nation’s consumer reporting companies. The Federal Trade Commission (FTC), the nation’s consumer protection agency, enforces the FCRA with respect to consumer reporting companies.
A credit report contains information on where you live, how you pay your bills, and whether you’ve been sued, arrested, or filed for bankruptcy. Nationwide consumer reporting companies sell the information in your report to creditors, insurers, employers, and other businesses that use it to evaluate your applications for credit, insurance, employment, or renting a home. There are three nationwide consumer-reporting companies — Equifax, Experian, and Trans Union.
Make Sure Your Credit Report is Accurate
The information contained in your credit report is the primary determining factor for your credit score. Your credit score, in most cases, not only makes it possible for you to obtain credit but also may determine how much interest you will pay on your loan or credit card.
My credit report showed that I had accounts listed under two names. And I remember when the sales clerk entered my name in the store's computer system wrong. She then entered the correct information and "everything" was fine...until I saw my credit report.
If I was a loan officer and saw that an applicant had applied for credit using an alias I know I would be a tad suspect about that person.
Identity Theft is a Problem
Has someone stolen your identity and opened credit accounts using your name, social security number and other personal information?
R. E. of Dallas, Texas, reports, "I received a bill from Sears - for $675.55 of electronic purchases I did not make. I notified Sears, and put fraud alerts at the three credit reporting agencies, and ordered copies of my credit reports. I was dumbfounded by what I discovered: over $7,000 of charges on seven credit cards, with attempts to open 6 more. Starting on September 9th, most accounts had been opened on the Internet. Despite the fraud alert, accounts are still being opened. An account was opened at Wicke's furniture store on September 22d. The suspect presented my driver's license - and, despite the fraud alert, the miswriting of my social security number, and obvious differences in the signature - was granted instant credit. Subsequently, nearly $3000 in charges were made, in 6 separate instances, over a four-day period." (Source: http://www.privacyrights.org/cases/victim15.htm)
Analyzing Your Free Credit Reports
Don't get your hopes up too terribly high about what your free credit reports can do for you. They are, after all, a list of your credit history and how your creditors report your payment activity. Your credit report also includes a list of companies who have made inquiries about you.
Your credit report does not contain your credit score, and it is your credit score that is of utmost importance if you need to obtain any sort of financing for your home business. You may wish to obtain a loan or credit card. As stated earlier, it is your credit score that could determine whether or not you are able to get credit and how much credit you can get and how much interest you will pay.
For more information about your credit score, credit reports and monitoring your credit activity, you may wish to read this article at http://www.creditcardsforamerica.com/creditcardarticles/freecreditscore.html.