Credit Score has becoming increasingly important in todays society.

It in large part will determine whether or not you get a loan for a car, a mortgage for your home, the interest rate on your credit cards, and even whether or not you qualify for a job.  Many people argue that someone credit, is one of the most important assets in someones life.  Being so important, it is time for you to get your credit report.

There are hundreds of reasons that a free credit report is important, but they all fall under two basic classifications: error checking and knowledge is power.  Let’s take a quick look at what this means.

Errors

Many people never think that would be any errors on their credit report, but some research estimates that more than 70% of credit reports contain errors.  In order to find out if your credit score is being hurt by improper reporting, you need to get your credit report from all 3 credit reporting bureaus: Equifax, Experian, and TransUnion.  Any or all of these reporting agencies may have errors that are hurting your credit score.  The best part, is that you can a free credit report sent to your home.

You may be wondering why these errors happen.  There are two reasons that errors occur: automation and identity theft.

Almost every agency that reports to credit bureaus does so automatically.  Maybe your information is entered wrong, or someone else’s information is entered wrong and their actions get attached to your account.  If this happens, the automation tools are not designed to check this and they will continue making inaccurate statements to your credit report.

The second cause of these errors is identity theft.  It is easier than ever to get your identity stolen because you give out your personal information more than ever before.  Social security numbers are needed for almost everything from credit card applications and shopping online to filing an insurance claim.  If someone else has your social security number, they need very little additional information to get a loan or open a new credit card under your name.  They could do this for years and you would never know if you didn’t get your credit report.  The best way to protect yourself from this happening is a combination of staying on top of your credit information as well as using 3-Bureau Credit Monitoring and Alerts.  These services will let you know any time something out of the ordinary is added to your credit report and often include a free credit report.

Knowledge is Power

The first piece of knowledge that is important is understanding that the three credit reporting bureaus are all independent agencies.  That means that more often than not, all three reports will have different information, thus report different credit scores.  Normally, lending institutions and credit card companies will look at all three reports to determine your future.  Some choose to use an average of all three scores, while other will just use the middle score.  Some institutions will only use one of three institutions.  This makes ensuring that your all of your reports are correct is paramount.

Another advantage of getting your free credit report is that by knowing your credit score, you will be able to negotiate the best possible terms on your next loan.  Most importantly, it can affect the amount of down payment that is required as well as your interest rate.  A lower interest rate can save you thousands or tens-of-thousands of dollars over the lifetime of your loan.

Once you get your credit report, you will be taking a step in the right direction.  You will be able to check your credit reports for errors, protect yourself from identity theft, and have the knowledge necessary to negotiate the best deals possible by getting low interest rates and minimizing your monthly payments.