Free Credit Reports Help You Get the Credit You Deserve

What Is a Credit Report?

These reports, and information about them, are available almost anywhere on the internet. Radio advertisements about free credit reports abound on the public airwaves. Several major businesses have recently emerged with the express purpose of providing credit reports to customers at no charge. Additional services are available at modest rates, but the basic report is usually free. Basically, your free credit report is collected file of information on you and your credit history. Financial institutions and credit card providers request these reports from the three major credit bureaus in order to determine your personal credit-worthiness. These reports include seven different sections.

Seven Things Included In a Credit Report

The first item of a credit report is personal information about the applicant. This includes simple facts such as name, address, spouse's name, date of birth, social security number, and other personal details. This information is often used to verify your identity before allowing you to view the report. For example if you go to a website that provides free credit reports and enter your name to request a report, they will usually ask you a set of multiple choice questions based on this personal data in order to make sure that you are who you say you are.

The second thing on your credit report is your credit and payment history. This is the bulk of the report. It includes several important pieces of information about the current state of your credit. It includes descriptions of all of the institutions that have loaned you money in the past (along with account numbers, size of the credit line, and the current status of the lines. This includes the dates the lines were opened, the dates they were last used, the repayment terms, the current balance, and the delinquency status of the account. This section of the report is very thorough and provides credit bureaus with most of the information they need to determine your credit worthiness.

Thirdly, the report also includes a section detailing your collection history. If at any point a collection agency has been assigned to secure payment on an account of yours, the contact information of the collection agency, along with the amount sought and the amount paid, will be listed in this section of the report.

The fourth section of the report contains records from federal, state, and local courthouses regarding financial rulings you have been involved in. If you have ever filed bankruptcy, had a lien placed against your personal property, or been involved in any other financial court case, the information will be included here.

Fifth, the report includes more detailed information on your personal history. Present and past employers, previous residence addresses, and other such information are included here. For the most part, this information has little to no effect on your eligibility for credit.

Sixth, this report includes a listing of all the times at which a credit granting agency has requested your report. Using this and other information in the report, an agency can determine whether or not you have been accepted for credit by other organizations.

The seventh and final section is the credit score. This is a simple number designed to summarize the report and provide an estimate of your financial health and the stability of your personal credit.

Why Should You Request the Report?

Now you know a thing or two about what information is available in this report. The real question is why you would want access to this information yourself? There are several reasons, but the first and most obvious reason is that the information in your credit report is what the card granting institutions and lenders that you apply to for credit will use to determine whether or not they grant your request. Knowing what they know about you is your first step to improving your chances for approval. Once you have access to the information in the report, you will be able to improve your credit worthiness. Knowledge is power. If you are unable to repair your credit score to the point where you will be approved for a regular card your only option may be a secured, prepaid credit card which is really a credit card for people with bad credit scores .

The first major thing you can do to improve your credit rating is to correct any errors in your report. The fact is, the credit bureaus keep records on every single person in the country. They have to manage vast amounts of data and generate countless reports. The information gathering and reporting methods they use are surpassingly accurate, but with that much information being processed, mistakes are bound to happen. If a mistake appears on your report, it may hurt your chances for receiving credit unjustly. Lenders use the report to assess the risk involved in loaning you their money, and you want the report to be as accurate as possible. Most websites that provide free reports also provide the necessary channels to repair an errant report. Many of these sites charge for these services, but it is far cheaper than the costs you would incur by trying to do it yourself.

How Can I Improve My Credit Report?

Once you have your credit report, you can begin the process of improving it. The first and most important step you can take is making sure all of your payments are made on time. If you must miss a payment, provide official notification to the lender in question to avoid a more substantial hurt to your rating. The second step is to develop a history of good payment. Apply for several cards with grace periods. Use those cards for all of your personal purchases, and pay back the balance before the period expires (it is wise not to charge money that is not available in cash to repay at this point). This will build your positive credit history and improve your credit score and eligibility.

Once your credit is repaired you will become eligible to be approved for accounts with a variety of perks including cash back credit cards, airline miles credit cards and travel rewards cards. For business owners small business credit cards and no annual fee cards are very helpful and money-saving, as are student credit cards to the youth of our nation.

Your credit report is essential to application processing for loans, lines of credit, and credit cards. It is wise to familiarize yourself with the contents of the report and do whatever is in your power to improve your credit eligibility. The first step is simple. Get your free credit report. It comes at no cost to you and takes only a few minutes of your time if you have access to the internet. You are entitled by United States law to a copy of any information credit bureaus provide about you; take advantage of that right. Please visit our free credit score section for additional information.

About The Author:

Don Willoughby is a successful author and regular contributor to http://www.e-credit-card-service.net. His websites provide research and applications for different types of low interest rate credit cards .