How To Get and Use a Credit Report

Everyone has heard of a credit report. But many people donít know exactly where to get it, or what to do with it when they have it.

What is a credit report?

It's basically a track record of your past financial performance.

What does it track?

It looks at when you've paid your bills, the amount of credit you currently have on your cards, how much debt you owe, etc. In other words, it lets any financial company you apply to know your past behaviour.

This helps them determine whether or not to give you a loan, mortgage, or credit card. It also determines what the interest rate will be. Even college loans are chosen based on your credit history. In other words, if you donít have a good financial past, your children might not get into the school they want.

So what's a good credit score?

Generally, a credit score at seven hundred or above will net you the best interest rates. And you will be able to borrow more money as well.

Who tracks it?

The three major bureaus are Experian, Equifax, and TransUnion. Which one should you get it from?

You can get it from just one. But this might not be the smartest option, because the finance companies look at all three when determining your credit worthiness. If you donít inspect each one, then you risk missing a major mistake.

You have two options: you can either go to each credit bureau site separately and get the report, or you can get all three at a third party site. The second option is obviously faster and easier.

But how do you use them once you get the reports?

The most important thing is to ensure there arenít mistakes. If there are, then you need to dispute them.

Often times a financial record will be recorded the wrong way by one of the bureaus. This is actually more common than you might think.

Remember, they don't check with each other to verify everything is correct. So not keeping track of this might prevent you from getting the loan or credit card you want.

It also helps prevent identity theft.

Since you can track all your financial history, it will be easy to see if there are charges you don't recognize. The bottom line: make sure you look carefully on each report to verify everything's correct. This could easily be the difference between getting that loan or not. It will also have a huge effect on the interest rate you pay.