Before I learn about getting access to free credit reports, could you clarify what credit reports are?

A credit report contains all the relevant information about you that pertain to credit worthiness. A credit and lender will request a copy of your credit file so that they can assess how you handle your credit. A credit report or credit file will contain personal identifying information, past and present credit accounts, matters of public financial records such as liens or bankruptcies, and the number of request for your credit file by banks and lenders when you apply for credit known as a hard credit inquiry. Another common practice is to convert the content of the credit report into a numerical representation called a credit score which is a easily understood and used way of judging credit worthiness.

Credit reports and credit files do not contain information about bank savings and checking accounts, certificates of deposits, brokerage or stock accounts, income information, employment history, and rental history even though a prospective bank, credit, lender, or employer may also includes these factors in assessing your credit worthiness or how you handle your finances.

Another important thing to note is that there are three major credit bureaus in the US called TransUnion, Equifax, and Experian. Each of them maintain a credit file report on you, independent of each other. Thus, because of differences in business relationships they may have with different banks or creditors, there may be differences in your credit files with the three agencies. When checking your credit report or opting for credit monitoring, it is important to choose a 3 in 1 credit report or triple credit monitoring service.

How do I get a free credit report, especially since I have heard about getting a free credit report annually as well as in television commercials?

There are two Federal provisions that allow you access to your free credit reports from the three major credit bureaus (TransUnion, Experian, and Equifax). The first provision provides that all consumers in the US are entitled to a copy of their credit file with each of the three credit reporting agencies once within a 12 month period for each. Some consumers will stagger their credit report requests throughout the year from the three as a method of keeping an eye of their general credit file over the year, although we do not recommend this since the three credit reports may actually have different information. We highly recommend a 3 in 1 credit report if you are opting for access or a 3 in 1 credit monitoring service if you are signing up for a credit report monitoring solution.

The second Federal provision is that if any company or bank is denying a credit related matter against you for reasons of what is in your credit report, then you have the right to request a free copy of that credit report within 60 days. Make sure you take full advantage of these two Federal provisions to receive copies of your free credit report.

Also, many identity protection and credit monitoring services will offer their customers unlimited free access to their credit report as part of their service. These free credit reports are often 3 in 1 credit reports that contain all the information from the credit files of all three credit reporting agencies of TransUnion, Experian, and Equifax. Other free credit reports from identity theft protection and credit monitoring solutions will only be from one of the three bureaus and thus will not be as effective for you to identify any errors, inaccuracies, or signs of fraud in all instances of your credit history.

What is the importance of knowing what is in your credit report file?

Well, credit files and credit reports are a major tool in how banks, creditors, and employers evaluate your credit worthiness and sense of financial responsibility. Before they get a copy of your credit report, it only makes sense for you to check and know what specific information is contained about you in those credit files. Also, your credit score is calculated from the contents of the credit report, making it doubly important.

An important part of checking your credit file through free credit reports is to find any errors or mistakes within them, which is a much more common occurrence than people would think. Should you find any inaccuracies, you should work immediately to dispute them and have them removed. Each of the three credit bureaus has their own procedures for this dispute transaction, so you should check with their websites or customer help for determining what documents or steps you need to take. There are also credit counselors and advisers that can help you through this process of fixing your credit report.

As an ally in your fight against fraud and identity theft, we highly recommend a credit monitoring service (one that includes your credit history file with all three credit bureaus) where the service will automatically notify you within 24 hours if there is any change made to your credit report. This allows you to spot errors and fraud right away and work toward reversing them.