Friday, July 6, 2012

What does your credit report say about you?

Reviewing your credit report is the easiest proactive means to protect your identity, but for some reason it is rarely done.  We are bombarded with many advertisements informing us on FREE means of obtaining your credit score.  Unfortunately, knowing your credit score is insufficient to protect yourself against identity theft. 

So what is the difference between your credit score and your credit report?  Your credit score is a number used by creditors, such as a bank, to judge the level of risk to loan you money.  From this number they derive the interest rate at which you will be charged. 

Your credit report, on the other hand, is the information used to calculate your credit score.  Information on the credit report includes lines of credit, delinquent payments, and inquiries for credit.  What should you be looking for when you are reviewing your report?  The simple answer is anything you do not recognize as your usage.  When your identity has been jeopardized, the thief will open up lines of credit and not make any payments.  As you review your credit report, look for any inaccuracies so you can immediately contact the creditor about the potential fraud.   
Congratulations, you have decided to check your credit report.  Which advertisement should you listen to so you may obtain your free credit report?  You may be surprised, but the answer is NONE of them.  Instead, was created to provide consumers with one free credit report from Equifax, Experian, and Trans Union each year.  Not every creditor reports to all of the big three agencies.  Therefore it is important to check your report from all three companies.
Before you go and pull all three reports at once, check out this little trick.  If you pull one report now, then wait 4 months then pull you second report.  After waiting 4 more months, pull the final report.  If you are counting months on your fingers, you will run out so I will do the math for you.  After waiting four more months, your original credit report will have been a year.  This means you can pull the first report again for free.  With this schedule, you will be able to pull three credit reports each year for free.

You work hard to build your reputation and as such it is important you protect it.

Identity Theft For Dummies -

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