Abhishek Agarwal asked: When a company is deciding whether or not to give you a loan, a mortgage or a credit card it checks your credit report. Your credit report contains information about every credit transaction you have made. If you failed to make a payment or defaulted on a loan then it will be on your credit report.
Until the US government brought in legislation to make this information freely available to you only finance companies, banks and mortgage lenders could see it. Now you are entitled to see it too.
The FACT Act made it possible to see your credit record for free every year for the first time. You need no longer be in the dark about what the finance companies know about you.
This is information about you and it is your right to see it. You should make use of that right because it affects your ability to get loans, credit cards and mortgages. If you are refused credit is probably because of something in your credit report.
There may be mistakes in your credit report that are stopping you from getting a loan. Someone may have fraudulently used your identity to take out a credit card or loan which they have not paid. You will then be left with a bad credit report that is not your fault.
There are three companies that compile credit reports. You can only get to see one of those reports for free. But if there are mistakes in that one then it will be worth your while to pay for the other two.
Not all the credit reporting companies have exactly the same information. They compile their data in slightly different ways.
Once you have seen the report and checked it against your own records you can correct inaccuracies any inaccuracies it may contain. There is a facility on the websites of the credit reporting companies for you to inform them of mistakes in your report. You will have to produce written evidence such as bank statements or credit card statements. But the process is quite simple.
By correcting inaccuracies in your credit report you are protecting your credit score. Even one mistake can make the difference between getting a loan and being refused credit.
All Americans can now get a free credit report every year. It is a responsible financial practice to take advantage of this opportunity. By doing so you are taking control of your own finances.
You can guard against identity theft, you can correct errors, and you can see if your credit score is falling because you have a pattern of late payments. It is in your interests to maintain a good credit score. If you check your credit record every year you can address problems as they arise.
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