Most people today are aware of how important a free credit check of their credit report is. This becomes even more important if you are trying to avail a loan, mortgage or seeking employment. The government has made provisions for every American citizen to be able to get his or her credit report for free from each of the three credit bureaus via Phone, mail or online. The online report can be accessed at the official website, annualcreditreport.com.
A free credit check can reveal a lot about your financial status. When you check your credit report, you must first scrutinize your personal details. This section contains details like your name, social security number, your current and past addresses and details like lawsuits and arrests. Check them to know if they are correct. A wrong address can indicate identity theft.
The second section contains all financial details about you like payments made and defaulted, outstanding debts, revolving debts, details of your mortgages and loans etc. A free credit check will reveal if the details are in order. If there are purchases and expenditure shown, which you have not incurred, it indicates identity theft. These kinds of errors must be reported immediately to the credit bureaus. Other than this, it reveals if your balance is correct, and by having a free credit check periodically, you can monitor your credit report.
If there are errors, you can initiate a dispute and get them corrected. If the dispute is verified and found to be correct, it is entered in the credit report and the consumer is informed. Otherwise, the bureaus will write to the consumer rejecting his dispute, citing reasons for the rejection.
When you check the next section, which is Inquiries, you will get to know how many people have accessed your credit report apart from you. Under the law, anyone who has to access your report needs your written permission. Also, having too many inquiries can lower the score. Therefore, when you check your credit report, note how many times your report has been checked by creditors and lenders, so that you can dispute if there is a mistake or can avoid such inquiries in future.
The last section is the collections section, which contains details of all outstanding and delinquent debts. If your debt has been handed over to a collection agency, then it lowers your score badly. By checking this section, you can have an idea of all your debts and can try and negotiate with the collectors for removal of these accounts.
When lenders check your credit report, they check the debts and add it to the loan that you are applying for. If it is too high, then you may not qualify for the loan. In order to avoid such a situation, it is essential to have a free credit check periodically.