Free Credit Reports As Mandated By Congress

Nearly every adult American has a consumer credit report, what provides personal information about you, including your name, address, your credit line, payment history and related financial information. These reports are assembled by three companies — Trans Union, Experian and Equifax — and are available to companies that want to check your credit. Because the information about you is so important and may not always be accurate, the US Congress passed legislation requiring that free copies of your reports be made available to you upon request.

Fair Credit Reporting Act (FCRA)

In 2003, Congress passed the Fair Credit Reporting Act (FCRA) what mandated, among other things, that consumers have access to their credit reports at no charge to them. The law was signed by President George W. Bush. The free access part was gradually rolled out across the country by region, taking full effect by the end of 2005.

Congress took action as it found that inaccurate credit reports “directly impair the efficiency of the banking system.” Before the FCRA was approved, consumers had to pay for their reports. Consumer advocates pushed for the law and asked that the reports be made available to American consumers for free according to DailyU.

Free Credit Reports

The new law makes getting copies of your credit report easy. The three credit reporting companies manage a website at www.annualcreditreport.com to allow consumers to order their reports.

Under the current law, consumers are entitled to request one free copy annually of each of their credit reports. Once the website has confirmed your information, you can view your report online and download it. If you order a second report from the same company within 12 months, a fee is charged. There is also a fee for obtaining your credit score.

Free Credit Reports As Mandated By Congress

Review Your Credit Reports

Beyond obtaining your credit reports, it is advised that you examine each one carefully. The information in your reports should be accurate, but if you find something that is incorrect or outdated, you should notify the respective credit reporting company. The company’s contact information is included with the report.

An investigation will be launched and if a mistake is found, a correction will be made and an updated report provided to you at no charge. Your credit score may be affected; it can take 30 to 60 days after your notification for your score to improve.

Your Credit Score

The information in your report can affect your credit score. Indeed, myFICO looks at five categories when assembling a FICO score: your payment history, amounts owed, length of credit history, new credit and the types of credit used. The first categories comprise nearly two-thirds of your score. Ninety of the top 100 banks use FICO scores when considering your loan application.

Credit Considerations

Your credit reports, indeed your credit score, can impact the way you live. Your mortgage, your ability to rent an apartment or buy a car, or even get a job may hinge on how well you manage your credit. Obtaining your credit reports allows you to manage your credit history and stay on top of your information.

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