A credit report typically comprises of some information about the credits, bills, debts and taxes owed by individuals, while a credit score defines the credit worthiness of individuals with a number. Creditors and lenders make use of the information from credit reports/scores to determine how much of a credit risk an individual is. Any individual can get a free credit report and score from the credit bureaus.
A credit score has a lot of impact in people’s lives because it may determine if an individual can get some credits or services like a loan or insurance etc. People with low or poor credit scores may be denied or charged with some high fees or rates for some of the services they may need or want. Some landlords may also use individual credit scores to determine who they may rent their properties to, while some employers may review a potential employee’s credit score too before granting an employment.
The three credit bureaus are Experian, TransUnion and Equifax, everyone is legally entitled to free reports with their scores from the bureaus annually (that is, every 12 months). The free reports are available through a central website set up by the three bureaus on the internet, or through a toll free telephone number or by using the mailing address for free reports provided by the bureaus. The credit reports are solely provided for free through any one of those options, individuals will need to provide the bureaus with some information to confirm their identities in order to get a report.
Any business, organization, landlord etc that an individual may have had some dealings or initiated some transactions or businesses with can report any unpaid debt, bill, missed payment or late payment by the individual to the credit bureaus, unpaid taxes (tax liens) and bankruptcies are also reported to the bureaus too. Each individual will need their three credit reports since some of their creditors or lenders may have reported what they owe or their debts to only one or two credit bureaus and not the three of them.
Individuals may also get a free credit report and score too, if they are victims of identity theft or are denied a product, service or credit because of some information on their reports. Additionally, each individual will also need to ensure that their credit reports are up-to-date and accurate, in order to avoid the negative impact of incorrect information on their scores. Individuals may dispute any inaccurate information on their credit reports with the credit bureaus.
If a dispute resulted in a change of information on an individual’s credit report, the credit bureaus are required by law to provide the individual concerned with a free credit report and score too. Ideally everyone should review his or her credit reports on a regular basis to ensure that the information on them are correct, to guard against identity theft and to also keep track of their credit scores, especially if they are going through a debt resolving process.