Requesting and Analyzing your Credit Report

An important preventative measure to avoid a bad credit rating is to request and analyze your credit report. Credit reports serve as a summarization of the last 7 years of credit history. These reports are detailed with information regarding how many active credit cards you have, mortgages, and any other loans that are outstanding. Based upon the information received; the bureau will formulate a credit score.

The three large credit bureaus will compile this lending information and calculate a score for each individual. The three major bureaus are Experian, Equifax, and Trans Union. It is imperative that you request a credit report from one of these major bureaus if you wish to improve your credit rating.

In most states legislation has been enacted that enables individuals to request one free credit report annually. Some states will require that you pay a small fee; typically $10-$15. Once the credit report is received it is impotent to review the report in-length to ensure your credit rating is accurate. Information booklets accompany most credit reports that will explain how to read your credit report, including example reports to promote understanding. Once you review this information you can then ensure your information is factual.

On occasion, there are discrepancies listed in the credit report. This can be caused by inaccurate reporting, identity theft, or fraud. If you identify a discrepancy while analyzing your report it is imperative you contact the bureau immediately and inform them which lender has reported negatively to the bureau.

It is also imperative you analyze your bureau to determine if credit cards or loans were taken out without your knowledge. This usually means identity theft or fraud has taken place. By analyzing your credit reports on an annual basis, you can protect yourself from identify theft and fraud and help improve your overall rating.