Free Credit Reports: More Than a Catchy Jingle

If you've turned on your television recently, you've probably encountered commercials featuring the musical stylings of a certain free credit report website's spokesman. The songs pitch a seemingly great deal---free, personalized credit reports, just a click away! Though these dittys may be alarmingly infectious, their pitch raises some questions. Like what is a credit report? What do the numbers mean? What do they usually cost?

What is in a Credit Report?
A credit report includes the following:

• All of the times you have borrowed money, the date, the credit limit and a history of how you have paid the money back
• A list of late payments that were 30, 60, 90 or 120 plus days late
• Any bankruptcies and tax liens,
• Each time that a creditor or potential lender has made an inquiry about you when the lender was deciding whether to give you credit, and
• Overdue payments that have been referred to a collection agency.

Bankruptcy stays on your credit history for 10 years and other negative information remains on your credit history for seven years. Credit inquiries stay on your credit history for two years.

What is a Credit Score?
A credit score uses a number between 300 and 850 to inform creditors and lenders of how reliable you are when it comes to paying off your debts based on the information from your credit report.


How can I get a free credit report?
As of September 2005, all US Citizens are eligible for one free credit report from each credit agency per year. To receive your free annual credit report visit www.annualcreditreport.com or call 1-877-322-8228.

You can also get a copy of your report for free anytime if:

1. You have been denied credit for any reason and a credit report was used in making the decision. You have 60 days to mail proof of rejection to the reporting credit bureau;
2. You are unemployed, actively seeking employment, or if an employer or potential employer has requested a credit report;
3. You are receiving public welfare assistance; or
4. You believe your credit report has been used to perpetrate a fraud.

A poor credit record can affect your ability to borrow money to pay for a car or an education, rent an apartment, buy a house or even get a job. Check your credit report once a year for errors or problems and write to the credit agencies to fix the errors or to insert a statement of explanation.