Credit Report

Some people don't really understand the importance of a credit report.  A credit report is a record of a person's borrowing and repayment history.  When you get a credit card you're given a limit on how much you can spend.  When you use the credit card, naturally you have to pay back what you've spent (plus interest, usually). The credit report shows how you are at making those repayments and how you are with spending. It shows more than this but that's the general idea.

Let's say you need to get a loan from the bank to help buy a car.  The bank wants to know how you are at repaying other loans you may have and how much debt you own.  That's why it's important to have a credit history. Actually, that's why it's important to have a POSITIVE credit history.

But nothing is perfect and sometimes your identity is stolen or companies get things wrong and mistakes are made. These are just some of the reasons why it is important that you check your credit report periodically. At the very least, check it yearly. If something is wrong with your credit report, you need to jump on correcting it immediately.

I know it may seem as though I'm overempasizing things but I'm really not emphasizing it enough. Your credit report can affect things like:

  • buying a home
  • renting an apartment
  • getting a loan for a car
  • getting a job

Do you see now? That's why I'm trying to get you to understand why this is such a big deal. Some employers including the government have been known to ask to check your credit report/credit history. Are you seriously in debt and thus liable to bribes? How you pay your lenders can reflect on the kind of person you are. That's something some (not all) employers take into consideration when they hire you.

Here's the great news. You can check your credit report FOR FREE annually via annualcreditreport.com.  Note that I did not say freecreditreport.com.  AnnualCreditReport.com is the official site.  Annualcreditreport.com allows you 1 free report every 365 days. Through this site you can check your credit report from each of the big 3 credit bureaus.  The big 3 are:

 If you want to check your credit report for FREE you HAVE to go through annualcreditreport.com. If you go through a specific credit bureau, you'll have to pay. Which you may need to do if you've already gotten your free report for the year.

And if you think your identity has been compromised or your credit cards stolen and you can't get the free report because you checked it 8 months ago, pay the money and check your reports. The cost of checking is small potatoes compared to not knowing and finding out the damage that's been done later.

Your credit score is a topic for another day, but I encourage you to learn more about it until then. Understanding credit in general is something everyone should know.  To learn more get a book, search the internet, take a class.  It's never too early or too late to learn. You should start building your credit history as soon as you can. Teens, talk to your parents for help with this because you want to do it the right way.

And if you don't want to learn, okay but at the very least check your credit report.

You Ought to Know: You can check your credit report annually for free via annualcreditreport.com

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