It was sometime after when recent occurrences like people hopelessly broke due to credit mismanagement that the government decided to step in. With the 2003 FCRA Act, all credit bureaus are now required to release a free credit report and score annually.
With this act in place and recent rampant activity of fraud in credit, it is recommended that habitual checking the credit report and score should be made. So what are the differences bet credit report and score.
Differences Between Credit Report and Score
A Credit report is detailed information of all your credit activities. It includes every relevant data: date of the activity, nature of the account, status of the credit and even your contact information. Credit reports are the key to your actual credit score.
So that in turn would define credit score as the average total of the scores noted in your credit report. The credit score would also include the reasons why score is lower than it should be. The credit score formula is always proprietary information of the company that formulated them.
Previously, a good number of documents are needed to win a credit line; detailed documents as to how you should pay and your monthly income. Now when applying for a credit account, your credit report history is computed faster than you can take time to think of and viola, your credit scores.
Today, lending and plan specialists do not need to do more casing than what's essential thanks to the credit report and score. Ultimately, every negotiation you make every loan you apply would be factorized largely on your credit report and score.
Perhaps this should be the best incentive for you to take the habit of credit report and score checking. Being aware should give you an idea on the nature of a deal you should be expecting and the interest rate.
For inquiries about how you can make your request, just visit AnnualCreditReport.com. Alternatively, you can also visit the Consumer Information section of the FTC (Federal Trade Commission) website for information on where to access your free credit report and score.
What Information Do You Need?
Now, when you request for free credit report and score, you will need to provide the following information:
- Name
- Address
- Social Security Number (usually just the last four digits)
- Date of birth
The information will be used to validate your identity and to protect your free credit report and score from would-be identity thieves and con artists. Remember to request only from AnnualCreditReport.com to make sure that your copy of your credit report is free. If you make your request directly with the credit bureaus, there may be a small fee involved.
Get Free Credit Report and Score Direct from the Credit Bureaus
Aside from getting free credit report and score from the AnnualCreditReport.com website, there is also another place where you can get copies of your records without paying a fee. The credit bureaus are in fact mandated by law to provide you free credit report and score in case of the following circumstances:
- You have been denied credit in the past 60 days
- You are unemployed
- You are on welfare
- You believe that your credit report contains inaccurate information due to fraud
Note that these conditions are exclusive. So if you are requesting free credit report and score directly from the credit bureaus and your reason is not enumerated above, then the bureau will charge you for it. The cost of credit reports vary from state to state. However, on average, one copy should be around $9.
Why to go for Free Credit Report and Score?
Your credit score is crucial to your loan application. Every time you apply for one, a lender will check your score to know how likely you'll repay what you owe. Since your credit score is based on information on your credit report, any change made on your credit report, any error or mistakes or inaccuracies could affect your credit score.
It is for this reason that you are advised to regularly check your free credit report and score to keep track of any adverse changes that could lower down your score.
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