Clara Ghomes asked:




Credit reports of an individual are a record of all his/her past lending transactions such as borrowing money, repayments, information regarding late payments (if any) and bankruptcy. The credit rating or score is based on the credit report of an individual. These ratings help in determining the ease and difficulty with which a person would (or won’t) get credit from credit card companies, banks or any other creditors.

The US laws have allowed every person to request for a free copy of their credit report every year. It’s very beneficial to get a free report, but the opportunity could get wasted if one doesn’t know how to read them. It also could be frustrating if a person doesn’t have any clue regarding how to read or understand their credit report. Nowadays, these reports are many important with the number of identity thefts which are on a rise and regular checking of reports helps a person in dealing with any issues in the report.

A person can request his/her copy of free report from any of the credit bureaus- namely TransUnion, Equifax and Experian (or TRW). One can also go online to get a copy of their financial records. One should make a habit of checking their report every year. Also, the credit bureaus should be contacted in case of any occurrence of incorrect information in an individual’s report.

After receiving the copy, one should sit down and review the report slowly and carefully. Each line of the report should be analyzed to get all the information regarding the debts. Many documents also provide ‘key’ with which one can understand the meaning of the symbols and codes used in the report. Also, a copy of the report should be faxed to the accountant for identification of any tax implications.

Any information which doesn’t make any sense should be highlighted. One should remind themselves to search online for explanation regarding the unclarified information. Friends with adequate knowledge regarding this report can be contacted for advice. One can also try free credit counselling agencies if there is still problem in analyzing the report, why it exists and the information on the report. Also, one should immediately investigate anything that doesn’t look familiar. The information should be reviewed on a monthly basis.

There are also companies which offer services of checking credit reports and confirming information for a fee. But, going online to request free such report can help in viewing the information for free. Also, these reports don’t mention the credit rating of an individual; they just provide all the list of accounts to check that the information on the report is true and contains no errors.

Harold