A person’s credit has a huge bearing on many aspects of their lives, probably more so than the average Joe realizes. Most people are very aware of how their credit report affects their ability to get long term loans and credit cards. However, it is also very possible for a person’s credit rating to influence whether they are chosen for a job or if they may be able to rent the apartment of their choice. Actually, credit reports are utilized often by a variety of different entities to make any number of determinations about countless people every day. This is why it is important to understand precisely what a credit report is and how to get a free copy of it annually.

What is a Credit Report?

A credit report is a running list of a person’s debts. These debts could include loans, credit cards and even medical bills. The purpose of the report is to detail precisely how the debtor repays what they owe. For instance, each time a person is more than 30 days late on a bill, it is denoted on their credit report.

It is obvious that a person who makes their payments in a timely manner should have a fairly positive credit report and high credit score. Those who are frequently late, have filed bankruptcy or have several unpaid debts will suffer a lower score.

What Personal Information Is Available on a Credit Report?

A credit report is full of highly sensitive, personal information. For instance, the typical credit report will not only have a person’s debts and how they repay them, but will also detail their current and past home addresses. Places of employment, arrest record and whether or not a person has been sued are also commonly found on credit reports.

Why Get a Free Annual Credit Report?

Well, unless someone is absolutely perfect in every way, they may wonder why on earth they would even want to see a copy of their credit report. The answer to that is as simple as it is frightening. Credit reports often contain significant errors, and the only person likely to catch these errors is the one that the report is about.

Getting a Free Credit Report

The Fair Credit Reporting Act is designed to promote fairness in the credit reporting business. Credit reporting companies, such as Equifax, Experian, and TransUnion, collect relevant data about people. They compile this data into reports and sell it to any number of entities, such as potential employers, credit card companies and possible landlords. However, at one time, getting a copy of one’s own credit report was quite difficult.

Now, a person is allowed to request one annual copy of their credit report from each of the above popular credit bureaus free of charge. This allows them to check their reports for errors, make certain that all information is up to date, and protect themselves against identity theft. Annualcreditreport.com is an excellent resource for simplifying this process.

A person’s credit report has a significant and long term bearing on their life. For this reason, it is a good practice to check one’s own credit report several times each year for errors. This process is made simple by the FCRA which allows each citizen to receive one free credit report annually from each of the three major credit reporting agencies.