Check and Improve Your Free Credit Report

A Credit Article Contributed by Girish Katyal

Need of a Free Credit Report

You need a free credit report whenever you want to apply for a loan or a credit. You need to know your current credit ratings before applying for a loan or credit. You should know if it is good or bad and if it is bad than what steps you can take to improve it. Because it is your credit ratings provided by your free credit report will determine that if you are eligible for a credit or a loan.

Checking Your Free Credit Reports

It has been reported by an agency that about 70% of the credit reports whether free or paid contain errors. The most common error happens when the information of another person, with a similar name or account number, is recorded in your credit profile. A more serious problem occurs when someone gains access to your personal information and commits Identity Theft. Whether you have a bad credit or an outstanding credit history, you should check your credit report regularly.

This is even more important especially if you are going to make a major purchase such as a car or home. A good and correct free credit report will make it easy for both you and your creditor to get process of getting or issuing credit completed. You check your free credit report with all three major credit reporting agencies: Equifax, Experian, and TransUnion.

After getting your free credit report you should check the accuracy of your personal information: your name, your social security number, address's etc. Also see the accounts listed in your credit history. This part lists your accounts with creditors and your payment history. Make certain that information is complete and has been reported correctly. Report any errors immediately to the credit reporting agency for investigation and correction.

It is also very important to check the number of credit inquiries made to your credit file and account for each one of them.

Improving Your Credit Standing by Getting Free Credit Report

Now you can get free credit report and use it to improve your credit standing. A credit rating is an impartial score of your credit. It determines that whether you are good for more credit or not. And after you get your credit rating free you'll also have an idea of how you can improve your credit if it requires it. It allows your creditors to predict how you will pay your future bills. The free credit report usually contains the following parts and by knowing which part is weakest you can work on it to improve your over all credit score.

1. Payment Record: How you have paid your bills in the past. It is very important factor in determining your credit score. Always pay your bills in time to get a higher score.

2. Total Debt: The next area of concern is the amount of total debit. Your credit score will be high if your debt is lower than the credit limits allowed. The lower it is the higher your score.

3. Time Period of Credit: Length of your credit also influences your credit score.

4. New Accounts: Opening number of new accounts will bring down the average time period of your credit which in turn brings down your credit score.

5. Credit Types: What types of credit you have also influences your score. People with most types get higher ranking.