Credit Reports and How They Matter To You

Credit reports are often regarded with dread, especially by those who have entered turbulent financial waters. But reality is never your enemy, even when it is unpleasant. In order to promote financial health, and resolve any debt problems you may have, it's essential to have the best information possible about your credit status. That information is found - both by the lender and, more importantly, by you - in your credit reports.Those reports are maintained by the three major credit reporting agencies: Equifax, Experian , and TransUnion.

The reports contains years of history regarding your credit cards, home loans and other debt. They also record any late payments that occurred and how late they were, 30-day past due, 60-day past due, etc. The reports will list any current and old address, and often your phone number and social security number.

That information is readily available to any qualified party - a bank, a mortgage lender, a credit card issuing company and certain others during legal proceedings. But, though the companies all genuinely try to maintain accurate records, the reports may contain errors.

Your credit reports may list loans as active that have been paid off. They may list current credit cards you canceled long ago. And, they may fail to list payments made to make up overdue amounts. Often, this isn't sloppiness on the part of the credit bureaus but simply a reflection of timing and other common human errors in keeping records. The world may be computerized, but those databases still don't always communicate effectively between companies using different systems.

You should get copies of your credit report from all three agencies for your self protection. Make a note of any errors, establish proof of the error, then send a registered letter with the proof to the agency asking them to correct the data.

Thanks to recent legislation, you can obtain one free copy of your credit report per year. Get All 3 FICO Scores and Credit Reports Here!

On a more positive note, having the information at your fingertips allows you to develop a debt-free plan for your future. Understanding your past credit history is the first step in creating that plan.