The Fair and Accurate Credit Transactions Act of 2003 provides people in the United States the right to one free annual credit report from each of the three credit bureaus. Many customers want to know, “How do I order my free credit report? And why does this information matter to me?” Consumers who monitor their credit reports will find errors early. According to a study by the US Public Research Interest Group, 80 percent of credit reports contain errors, and 25 percent of those errors are serious. Common errors include inaccurate personal information, listing “closed” accounts as “open,” omitting loan accounts and listing mortgages or loans twice.

Ordering a Free Annual Credit Report Can Help You Monitor Identity Theft

Monitoring a free credit check will also alert consumers about identity theft before it happens. For instance, if a thief has opened new credit accounts in a consumer’s name, then the accounts will appear on the credit report. Also, changes of address may appear on the free annual credit report if a thief has obtained a new residence using the consumer’s credit report. Having a clean credit report will actually save consumers money. For instance, many insurance companies use a credit score scale to determine the rates that customers will pay for auto and homeowner’s insurance. People with poor credit tend will typically have higher premiums.

Protect Possible Job Offers by Checking for Errors On Your Free Annual Credit Report

A clean credit report will also help people to find better jobs. Recent surveys have shown that 35 percent of employers use a credit report as part of the pre-employment screening process. If someone applying for a job has incorrect information on a report, then that error could mean the loss of a lucrative job offer.
Lenders look at a customer’s credit score to decide what interest rates they will pay for loans and mortgages. Errors on a credit report could mean significantly higher interest rates, which will cost consumers a great deal of money over time. A consumer will not see a credit score on their free annual credit report, but the score may be obtained by contacting the Fair Isaac Corporation and paying a small fee.

READ THE FINE PRINT: Make Sure That Your Free Annual Credit Report is Actually Free

Consumers may get their free annual credit check on the internet, over the phone or through the mail. When ordering online, consumers will want to ensure that they are actually ordering a free, no obligation report. Some companies offer free credit reports and then charge consumers for monthly credit monitoring. The federal government’s website will not require payment information. Taking advantage of a free annual credit report is an important part of a healthy financial plan. Experts recommend obtaining one free report every four months from one credit bureau rather than ordering all three at once. This way, consumers will be reviewing their free annual credit report at least three times per year.