If you haven't done so already, take a few minutes to order your free credit report. In the finance world, your credit score is your identity. It dictates how you can borrow money, who will lend to you, and what interest rates you will pay. To make sure your credit report is accurate it is recommended that you personally review it at least once every few months.

Your credit score is a 3 digit number that ranks you as a credit consumer (the higher the score the better). Your score is a statistical computation based on factors such as type and age of your accounts, bill paying history, late payments, any collection actions, outstanding debt, foreclosures etc. Each contributing factor effects your credit score differently and each credit agency (Equifax, Experian, and Trans Union) uses its own evaluation system.

The purpose of the credit score is so lenders can compare your personal financial profile to past consumers with similar profiles to predict how creditworthy you are.

What does your financial profile say about you? Does it say that you are diligent with your record keeping, fulfill your obligations by making timely payments, and live below your means? If so you likely have a high credit score (750 or above). If your profile says you often miss payments, charge more money than you can pay back, and have accounts in collections, you probably have a low credit score (under 600). Because your credit score determines your interest rates, guarding your score saves you money. The better your score the lower your rates and fees.

Each of the three major credit agencies is required by law to give you one free credit report a year. To get that report you can visit the web site www.annualcreditreport.com. You can also do it through the mail by sending your request to:

Annual Credit Report Request Services

P.O. Box 105281

Atlanta, GA 30348-5281

If you request through the mail you must include your full legal name, social security number, date of birth, present address, and your previous address. If you do not include all of that information it can delay the process.

Because you can get 1 free credit report from each of the 3 agencies each year (3 reports in total) it is advised to get 1 report every 4 months. This way you can keep a closer eye on your credit score and help prevent identity theft. You can request an Equifax report today, then an Experian report 4 months after that, and a Trans Union report 4 months after that. It is easier to remember if you order your first report on a day you won't forget like your birthday.

Once you receive your free credit report you should review it carefully. Don't just look to make sure the debts are yours. also look to match the debt amounts and the dates with your financial statements. If there are any credit accounts on your report that you are unaware of you may be a victim of identity theft. Close that account immediately and notify the issuing company.

If you do find errors on your credit report they can be disputed, but you moust do so in writing. Send your correspondence to the credit reporting agency and include all pertinent information such as the account number, documents that support your claim, and a copy of your report with the disputed item circled. DO NOT send originals as you will not get anything returned to you.

Credit agencies have 30 days to address any dispute they receive in writing. If a correction is made they will notify you through the mail. They are also required to give you a second free credit report if corrections are made. If no correction is made you can request that a statement of dispute be added to your file.

Whereas your credit score is your financial identity, taking the time to review it regularly and checking it for accuracy is a sound investment.