The federal law entitles everyone to get a copy of the free credit report once in a year. This free credit report government can be accessed by every American consumer by placing a request by phone, mail or online at the official website, AnnualCreditReport.com. There are three major credit bureaus, Experian, Equifax and TransUnion that prepare your credit report.
The credit report government contains four sections - personal information, financial information, Inquiries and Collections. These four together make up your credit history. But the biggest drawback of this credit report is that it does not contain the credit score. Lenders and all financial institutions use credit score to determine your financial status at a glance. It is calculated by taking all aspects of your financial history into consideration.
For a layman too, unless the credit score is present, it is not an easy task to make sense of the credit report. You will have to scrutinize each and every entry carefully to understand how good your credit rating is.
Another drawback of the free credit report government is that it is available only once in a year. Though each of the three credit bureaus are legally bound to provide the consumer with a report, accessing only one report at a time, gives an incomplete picture of the credit rating. When all the three reports are accessed at the same time, the consumer has to purchase another credit report, when he requires it later within the same year.
These reports are compiled from the information provided by numerous financial agencies, like banks, lenders, creditors, et al. Do not be surprised if something has been incorrectly reported or reflected on your free credit report government. According to a statistics, approximately 70% of the reports contain errors. So, it is essential that you be prompt with your credit reports that are later corrected on being disputed.
But despite all this, a free credit report is an important financial document and must be reviewed and monitored periodically so as to check the credit rating. You can buy the credit reports with credit scores for a nominal monthly rate. These private companies also provide you with credit reports more than once a year along with a free credit score. So, while the credit report government is free, the credit scores are not and the reverse is true when you approach private companies.