How healthy is your credit?




Eligibility of Debtors for Free Credit Reports

Many people are on the lookout for free credit reports that can help them build up strategies and plans to improve their credit scores considerably. In such cases, they have to get it either from one of the three national level credit reporting agencies or from the government itself.

Federal Laws on Free Credit Reports

Under the Federal Credit Regulation Act or FCRA, a citizen is eligible for one free credit report annually from the credit reporting agencies, Experian, Trans Union, and Equifax. It is not a matter of their sweet will but it is a veritable right of each of the citizens. Moreover, many states have also put in place similar laws. Not only the recent amendments has made it mandatory for all the three credit reporting agencies but states like Alaska, Colorado, Hawaii, Idaho, California, Arizona, Montana, New Mexico, Utah, Washington, Wyoming, and Nevada have also made similar provisions.

Utilities of Free Credit Report

Free credit reports are not only economic but also provide huge information for the person concerned about the credit status. Typical credit report includes the following information.

  • All information that will determine the credit score of the person concerned.
  • It offers the current status on the credit scores.
  • Numerical depictions of the credit worthiness of the person whose credit scores is obtained from the reporting agency.
  • It helps understand the factors that are influencing the credit scores of the consumer whose credit is affected.

Effects of Low Credit Scores

Numerous effects would be there when someone’s credit score goes down substantially. It will not only effect adversely the possibility of getting finance from the financial agency but will also have an impact on the financial standing of the consumer. It would therefore be good finding out ways and means of getting rid of such low credit scores.

Getting Out of the Ditch

For healthy financial status it is necessary getting out of the financial ditch of low credit scores. Some of the ways are as follows-

  • Getting tips for repairing the credit reports from the credit reporting agencies or experts.
  • Rectifying the mistakes in the credit reports that can substantially reduce one’s credit score is very important.
  • It is therefore necessary constantly monitoring the credit record and keeping track of the entries made therein.
  • Even disputing the entries can get rid of such wrong records. That is why it is a prudent step checking the free or paid credit report for any possible errors.

Error Detection in Credit Report

Steps involved in error detection in credit reports would be –

  • Ensuring that the personal information of the user is correctly entered in the report.
  • Even spelling errors in name or address can render the report unusable.
  • Marital status is another important aspect that should be correctly reported.
  • Closed accounts must not be reflected making the consumer defaulter unnecessarily.
  • Ensuring that previous corrections do not reappear resulting in low scores.

No one can undermine importance of credit reports. But there is a problem. Since each of the credit reporting agencies maintains its own version of record about the financial status of the consumers, they vary quite often from each other. It is therefore essential to check all of the reports so as to find out if there is any error in either of them and on detection getting them rectified.

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