How to Get Your Free Credit Report
Everyone should know what’s on their credit report. Checking credit regularly is a big part of maintaining financial health, yet many Americans have never looked at their own credit reports. Part of this may be due to the common misconception that checking your own report will result in a negative mark on your credit that could hurt your overall credit score. This is simply not true. While having credit pulled by a lender will result in a hard inquiry on your report, which can have a negative effect on your score, everyone has a legal right to view their own credit reports without penalty or damage to their credit scores.
The perceived cost involved in obtaining credit reports is another common reason people fail to look at their own credit reports. There are many companies online (including the credit bureaus themselves) that offer credit reports for a fee, often alongside credit monitoring services at a monthly or yearly rate. For many Americans, especially those who are not currently looking to obtain new credit, such as a car loan or mortgage loan, the cost associated with viewing credit reports may be hard to justify. According to the Fair Credit Reporting Act (FCRA), however, the three major credit bureaus (Equifax, Transunion and Experian) are required to provide consumers with a free copy of their credit report at least once per year, upon request.
There are other instances when you are entitled to a free credit report, as well. For example, any time you are denied credit based on information from your credit report, you are entitled to view that report for free. For example, if you apply for a car loan and are turned down, you are entitled to a free credit report from the credit bureau(s) used by that lender. Lenders must provide, in writing, the information they used in determining your credit worthiness, including which credit bureau(s) they used to pull your credit. In most cases, you can obtain your free copy of your credit report by simply visiting the credit bureau’s website directly and filling out an online form within 60 days of the adverse action or denial of credit.
Additionally, if you are unemployed and plan to look for work within the next 60 days, you are entitled to a free credit report per year (in addition to the one everyone is entitled to per year), since many employers today check credit when making hiring decisions. Likewise, if you are on welfare or have been the victim of identity theft, you are entitled to a free copy of your credit report each year, in addition to the free report you’re already entitled to once per year.
Checking your credit report is a good way to make sure everything on your report is accurate, allowing you to dispute inaccuracies or spot identity theft quickly. Viewing your credit report regularly is also a great way to start working on building or repairing your credit, which can have a big impact on how lenders view you when you apply for loans or lines of credit. People with good credit are rewarded with lower interest rates and more credit options than those with poor credit, and checking your credit report regularly is your first step in ensuring you have reasonable credit options available to you when you need them.