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All that you need to know about your credit report

By Faye Mergel
Published: Friday, December 3rd, 2010

All of us are aware of the importance of our credit reports in our daily lives and that it makes sense to avail the same at least once a year.  Well, getting the credit reports once a year is just part of a bigger puzzle as there are a whole lot of other things that one needs to look into as well.  Firstly, check to see if there are any errors in the credit reports and ensure that there are no errors in the report.  Errors in the credit history of a person could cost a lot in the run.  Thankfully, ordering a credit report is not such a difficult thing to do.  All that one needs to do is to log on to annualcreditreport.com and order for one free copy of the credit report once a year from any of the three credit reporting agencies such as TransUnion, Equifax, and Experian.  Once you receive these reports go through them very carefully.  There could be credit card accounts that you would have closed many months ago, but it will still show that the account is open.  Look for auto loan payments that are reflected as ‘missed’ as you would have paid it on time.  Once the errors are noticed, get it rectified in writing from the credit bureaus as this will help boost the FICO score.

Knowing your credit score is equally important.  Just getting the credit report will do no good as lenders would be interested in looking at the credit scores as well.  This number is a dead giveaway as to how well you have been able to control your finances.  If you have missed on several credit card payments the score will obviously drop.  It is the same with delayed auto loan payments.  However, for those of you who have made your payments on time and carry only a small balance of the debt, the scores would look healthier.  The best credit score that one must have is at least 720 or above.  With this score one could easily avail loans at lower interest rates.

There are many companies that fool their customers with the offer of a free credit score.  You will be made to give your card number and they will use the same to sign you up for a credit monitoring service that is for free.  If you don’t cancel this membership on time, you would be charged $14.95 until the membership is canceled.

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