Personal Finance & Free Credit Reports

Identity theft is big money these days-- both for those who are perpetrating it as well as for those who seek to protect the rest of us from the unscrupulous. There is nothing inherently wrong in making money for a service both offered and provided, but problems arise when we are charged for something that was supposed to be free. Each of us is entitled to one free credit report per year from each of the three major credit-reporting agencies. These reports are valuable tools in several ways and can be vital for keeping personal finances in order. The simplest use of a credit report is to tell the inquirer their almost exact credit rating. I say almost because each agency figures things slightly differently, but they will all be within a fairly close point spread.

This is important if one is looking to get a loan for any reason. The better the credit score, the higher the odds of getting a loan at all, and the better interest rate the borrower will qualify for. Knowing this will help the would-be borrower to manage their money, and even decide if this is the best time. It may be more prudent to take some steps to bring your credit up a few points, and then try to take out that loan.

An equally, if not more important use of these reports in keeping track of personal finances, is protection from identity theft. Every time a credit is applied for in one’s name, this will appear on the report. Periodic checking of the report can be very useful in finding out that someone is using your name before you’re told that you owe several million dollars on a summer home in Antarctica that you didn’t know you had.

Credit reports are excellent tools in managing one’s money and personal finances, but it is easy to find yourself getting charged for a service that the government offers for free. The only website to get the totally free credit report from is www.annualcreditreport.com; others can charge a range of prices for this service. The companies that charge for the reports usually offer other valuable services such as alerts, but it is important to know what you are signing up for when you click on the link that generates your report.

Depending on what your need is, and how you want to use it, there are two ways to request the credit reports. As you can get one from each of the three big companies free every year, requesting a different report every four months will serve if you are using the checks strictly for monitoring purposes. However, if this is in anticipation of a major loan, it might be better to get all three at once to make sure that there is nothing amiss.