How can I get a totally free credit report?

Monitoring your credit will go a long way when the time comes for you to obtain a loan. Several people are unaware of what their credit score is and are shocked when they are turned down for a loan because they had bad credit. There are several things that can have a negative impact on your credit score that you might not be aware of. For example:

• Carrying more than 30% of your total credit limit on each credit card.
• Carrying more than 50% of your total balance month to month.
• Having too many credit cards or personal loans.
• Not having a long credit history.
• Having delinquencies

In 2004, a California Public Interest Group study reveled that 71% of all credit reports contained errors. Due to these errors, 25% of these consumers were denied credit due to these errors. As you can see, it is very important to review your credit report often so you won't be denied credit for an error.

Fortunately the Fair and Accurate Credit Transactions Act of 2003 (FACTA) made it possible for anyone to obtain a free copy of their credit report. Equifax, Experian and TransUnion will all provide you with one free copy of your credit report once a year. There are 3 ways to order a free copy of your credit report from FACTA:
1. Online at www.annualcreditreport.com
2. Via telephone at 877-322-8228
3. By mail. You will need to print a request form from the annualcreditreport.com website and mail the completed form to the address listed on the form.

There are other companies who are not part of FACTA that will allow you to obtain a free credit report, but then you will be required to sign up for a subscription service in which you will be charged a monthly or per-use fee.

Beware of scam sites. Several web sites will claim they will offer you a free credit report in exchange for your credit card information and other personal information such as your social security number. Because you can easily land on a scam web site, you should use the Federal Trade Commission's web site for referrals.

You can contact each of the credit bureaus individually to obtain a free copy of your credit report but this can only be done once a year. There are other ways to obtain a free credit report, they are outlined below:

• You are on welfare
• You had an application denied due to information on your credit report. These applications can include employment, insurance, and credit applications. Once you are denied, you have 60 days from the date of denial to ask for a copy of your credit report. The company who denied your application is required to send you a notice that will include contact information for the credit bureau that provided the company with your credit report.
• You are a victim of identity fraud and there is inaccurate information on your credit report.
• You are unemployed and you are planning on looking for work within the next 60 days.

What information will I need to obtain a credit report?
If you have decided to order your credit report, you will need to have some information handy. Start by making a collection of all your basic information like your social security number, financial information, and previous address if you have moved within the last 2 years. You will want this information ready when you are cross checking the reports with your actual information. Financial information is typically the most common error that is reported. Be sure you have a few minutes to review everything and correct it with the proper bureau if it is wrong.

You will also need to decide how you are going to apply for your credit report. Again, you can apply for your credit report online, via telephone, or through the mail. If you decide to mail in your application, allow 2-3 weeks for your report to arrive.

Once you obtain the report it is important to view every detail of it. For example, your credit report may be stating that you have an old account that is still active. If you have closed this account, you will need to write to the proper credit bureau and inform them that they have inactive information. Small mistakes can be costly to your credit report. You may be denied a loan based on a small mistake on your credit report.

How do I dispute information on my credit report?
Because your credit report contains key information about the way you have paid your bills, every creditor will look at your credit report before they grant you a loan. Your credit report helps the creditor make a proper decision as to how much of a risk factor you are. If you find that something is inaccurate on your credit report, you will need to correct it immediately.

The Fair Credit Reporting Act (FCRA) allows you to correct any inaccurate information on your credit report. If you find something that is incorrect on your credit report, then you need to write a letter to the proper credit bureau and the information provider. Here is the process you need to follow when you are disputing information:

• Gather any cancelled checks or statements that will support your claim. You will want to include copies of the statement or check with your letter of dispute. Include a copy of your credit report with the inaccurate information highlighted. Be sure that the check or statement has your name, address, the information you are disputing and the reason the information on the credit report is inaccurate.
• Send your credit report dispute information via certified mail with a return receipt requested. Keep a copy of the letter you have sent the credit bureau along with any other information you are including. By using certified mail with a return receipt, you will have proof that you have not only sent the letter, but that the credit bureau received it.
• Once you have filed a letter, the credit bureau will have 30 days to investigate your dispute and respond to you in writing with the results of the investigation. All the information you provided to the credit bureau will be forwarded to the original information provider. The original information provider will investigate the information on their end and respond to the credit bureau.

If your dispute resulted in a change, the credit bureau will provide you with a new credit report along with the results of the investigation. You can also request the credit bureau to provide any creditor, who has pulled your credit within the last 6 months, with a fixed credit report.

Be sure to check all 3 credit reports if you have found inaccuracies with one bureau. Here are the addresses to the 3 major credit bureaus:

Equifax
P.O. Box 7404256
Atlanta, GA 30374

Experian
P.O. Box 2002
Allen, TX 75013

TransUnion
P.O. Box 390
Springfield, PA 19064

Again, you can obtain one free credit report from each of the credit bureaus once a year. If you apply for more than one report, you will have to pay or sign up for a subscription service. A good suggestion is to stagger your credit reports from the 3 agencies. This allows you to keep track of the major changes that may impact your financial future. It is a wise idea to obtain your credit report before you apply for a second mortgage or before you apply for a student loan.

It is a wise decision to take advantage of this free opportunity to obtain your credit report. Remember that any errors or omissions on your credit report can reduce your credit score and end up costing you money when you are applying for any type of credit.

A last tip to remember is to be cautious of where you obtain your credit report from. The Federal Trade Commission advises everyone to correctly spell "annualcreditreport.com" when they are seeking a free credit report. You can also find a link to this website directly through the Federal Trade Commission's site. This will help you to avoid being directed to fraudulent web site. Some companies will require you to purchase something before they will provide you with your credit report. The FTC has reported that several people have complained about companies who provide "free" credit reports in exchange for a purchase of another product. Be weary of television ads, email offers, or online searches that are promising free credit reports.

Recently the FTC settled a lawsuit against Consumerinfo.com. This company promoted free credit reports for Experian. They promoted free credit reports on television, radio and the internet. Their web sites freecreditreport.com and consumerinfo.com had financial information for thousands of customers. Anyone who was enrolled in their services between 2000-2003 will be eligible for a refund due to their fraudulent activity.

Before you sign up with a company to obtain your credit report, be sure you have investigated the company and you know they are legitimate.