Most people have seen some sort of ad whether on TV or the internet offering a free Credit Report or ways to improve your credit score. You may wonder what all the fuss is about, but the Credit Report is a key document to your financial control. It is a basis for your credit score, which can determine your access to loans, credit cards and mortgages, the interest rate charged and any caps imposed. Having a positive Credit Report can boost your financial savings significantly with lower interest and eligibility for loans by raising your Credit Score. For information on your Credit Score and its importance, see Credit Score.

A credit report, also known as a credit file or credit history, is a document detailing the history of your application for and receiving of credit. Anyone who has ever applied for a credit card or insurance or any other line of credit has a credit report. Yet some of the recorded information may fade after time, see the brackets below. The most common information included is:

• Personally Identifiable Information such as your name, birth date, addresses both present and past, your Social Security number, and your spouse's name.
• Lines of Credit opened such as mortgages, credit cards, store cards, loans, etc.
  
• Payment History including dates of accounts, balances, credit limits, late payments, accounts turned over to collection, etc. .
  
• Public Records such as bankruptcies (10 years), unpaid tax liens (15 years), and other public record information including unpaid child support (7 years).
  
• Inquiries by any creditors (information remains 1 Year) and requests by employers (information remains 2 Years)

Negative information typically lasts about 7 years, bankruptcies 10 years. Exceptions with no time limit are criminal convictions, applications for more than $150,000 worth of credit or life insurance, information reported relating to employment applications that pay more than $75,000/year. Lawsuits and unpaid judgments against you last the longer of 7 years or until the statute of limitations runs out.

While there are many consumer reporting agencies who can create credit reports, only three operate nationwide and are the most well known: Equifax, Experian, and TransUnion. CRAs collect information from public records and places you applied for credit, then sell that information to others who have a legitimate need. To prevent abuse, the government has imposed restrictions under The Fair Credit Reporting Act (FCRA) which "promotes the accuracy, fairness, and privacy of information in the files of the nation's consumer reporting companies." The FCRA is enforced by the Federal Trade Commission.

The information in a credit report is provided only to those with a "legitimate business need," including but not limited too:

• Credit providers
• Collection Agencies
• Employers (with your consent)
• Insurance Companies

Reviewing your credit report is important to prevent fraud and identity theft as you'll be able to see any suspicious requests or accounts. Also, since this information is most likely going to be requested by lenders you can correct inaccuracies before applying for credit. A simple mistake on your credit report could derail your attempt at a car loan or mortgage application.

Under the Federal Credit Reporting Act everyone is allowed one free credit report every 12 months from each of the three CRAs - Equifax, Experian and TransUnion. The three reports can be requested all at once or spaced out through the year and has no affect on your credit score. To make it simple the three agencies came together and created one website, phone number and address to request your free credit report. Applying by web can you get access to your report within minutes, by phone within 15 days and by mail 15 days after receipt of your request.

On the web: AnnualCreditReport.com

By phone: 1-877-322-8228

By Mail: Print out this Form from the website and mail to

Annual Credit Report Request Service
P.O. Box 105281
Atlanta, GA 30348-5281

This is the only way to obtain a free credit report according to the Federal Trade Commission. Any other sites that offer free credit reports such most likely have strings attached. You'll be required to fill out information in order to get your credit report. You need your name, date of birth, social security number, address and prior address if you've not lived in your current residence for the past 2 years. Additional information may be requested to confirm your identity.

According to FCRA, you may also be entitled to a Free Credit Report under the following circumstances:

• You request your report within 60 days of receiving notice from a company denying you credit, insurance or employment. The notice you receive will give you the contact information of the consumer reporting company used.
  
• You're Unemployed and planning on looking for work within 60 days
• You're on welfare
• Your report is inaccurate due to fraud including identity theft

Otherwise, requesting a credit report will run you about $10 and require you to contact the actual CRA.

When you receive your credit report, it should be checked for errors. If any are found then follow these steps recommended by the Federal Trade Commission:

• Write to the Consumer Reporting Agency including all relevant documents (use copies)
• Send by certified mail "return receipt requested" for record keeping purposes and keep all correspondence concerning the dispute
  
• Include your name, address, the item in question, the facts and why you dispute the item (The Consumer Reporting Agencies are required to investigate)
• The CRA sends all appropriate information related to the inaccuracy to the group that provided them with the information. After they investigate the results get sent back to the CRA.
• If the information provider concludes the information was wrong, they are required to notify all 3 CRAs so they can correct your file.
  
• After the investigation ends, the CRA will send you a copy of the results (in writing) with a free credit report (if your credit report was changed)

• If requested by you, the CRAs will send notices of the change to everyone who received your credit report within the past 6 months, within the past 2 years if an employer requested it.

A second action to take is to:

• Tell the creditor / information provider in writing that you dispute an item. If the creditor contacts any CRA about the item it must include a copy of your dispute. If you are proven right and the information was wrong, the creditor may not rereport it.
  

If the investigation doesn't end with a change to your report, you can request that a statement of dispute be added to your credit file and future reports. For a fee, you can have this statement sent to those who recently requested your credit report.

(Copied from Federal Trade Commission Website)

Date
Your Name
Your Address, City, State, Zip Code

Complaint Department
Name of Company
Address
City, State, Zip Code

Dear Sir or Madam:

I am writing to dispute the following information in my file. I have circled the items I dispute on the attached copy of the report I received.

This item (identify item(s) disputed by name of source, such as creditors or tax court, and identify type of item, such as credit account, judgment, etc.) is (inaccurate or incomplete) because (describe what is inaccurate or incomplete and why). I am requesting that the item be removed (or request another specific change) to correct the information.

Enclosed are copies of (use this sentence if applicable and describe any enclosed documentation, such as payment records and court documents) supporting my position. Please reinvestigate this (these) matter(s) and (delete or correct) the disputed item(s) as soon as possible.

Sincerely,
Your name

Enclosures: (List what you are enclosing.)