Well it has been more than a year since I last checked my credit score, so I decided to go ahead and get my free report for the year. Last year I was a little unclear on what I was legally entitled to. I imagine that some of the Debt Wrench readers might find this system a little confusing too. With all the scams and companies out there that claim to give you a free report(among other things) there is need for clarification. So let me clarify to the best of my knowledge. I would also encourage you to do some reading on your own to verify all the information shared here.

• You are legally entitled to get one free credit report from each of the three national credit bureaus (Experian, Equifax and TransUnion) per year. This is a federal law.
• They are legally obligated to give you that information once a year for free.
• If you want to know your “credit score” (aka FICO score) you will have to pay extra. I paid around 8 bucks for my score from Equifax.
• There is only one site that is authorized to get your three free annual credit reports under federal law. Which is AnnualCreditReport.com. (see FTC website)
• You can go to each individual website of the 3 national credit bureaus for your credit reports. In fact Annualcreditreport.com really just redirects you to each website. It is more convenient to get all three reports at Annualcreditreport.com, because you don’t have to fill out the information 3 different times on each of the three credit bureaus’ websites. The website will “autofill” your information as you are redirected to the individual bureau website.

How do I monitor my credit reports for free year round?

Well it is simple only request the report from one of the 3 bureaus at a time.  If you space out your requests 4 months apart you’ll have monitored your credit report all year compared to if you only checked all three at once.

This is the cheapest method to monitor your credit report and unfortunately it isn’t the best. But if you are like me you hate paying people to find out what  records they are keeping on you then this might be the method for you.  Here are a few of the disadvantages I can see to this method.

• Not all creditors report to all three bureaus. One report might not fully reflect your entire score/credit history.
• Checking your reports only three times year might not catch identity theft among other things in time. However it is far better than once a year or never.

Below is some if I pulled for the Federal Trade Commission.

What is AnnualCreditReport.com?

AnnualCreditReport.com is the ONLY authorized source to get your free annual credit report under federal law. The Fair Credit Reporting Act guarantees you access to a free credit report from each of the three nationwide reporting agencies — Experian, Equifax, and TransUnion — every twelve months.  The Federal Trade Commission has received complaints from consumers who thought they were ordering their free annual credit report, but instead paid hidden fees or agreed to unwanted services.  Don’t be fooled by TV ads, email offers, or online search results.  Go to the authorized source when you request your free report.

How do I request my free credit report?

You can request your free report online, by phone or by mail. Visit AnnualCreditReport.com, call 1-877-322-8228, or fill out the Annual Credit Report Request form and mail it to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.  No matter how you request your report, you have the option to request all three reports at once or to order one report at a time.  By requesting the reports separately, you can monitor your credit more frequently throughout the year.

Why should I request my credit report?

Because the information in your credit report is used to evaluate your applications for credit, insurance, employment, and renting a home, you should be sure the information is accurate and up-to-date.  In addition, monitoring your credit is one of the best ways to spot identity theft.  Check your credit report at least once a year to correct errors and detect unauthorized activity.

What should I look for when I review my credit report?

If you see accounts you don’t recognize or information that is inaccurate, contact the credit reporting agency and the information provider.  For more information, read the FTC’s tips on how to dispute credit errors.

If you suspect identity theft, you may need to place a fraud alert on your credit report, close compromised accounts, file a complaint with the FTC, or file a police report.  Start by visiting the FTC’s identity theft website.

FTC Seeks Comments on Proposals to
Amend ‘Free Credit Report’ Rule<
The Federal Trade Commission is seeking public comment on proposed amendments to the Free Annual File Disclosures Rule, also known as the “Free Credit Report Rule.” The proposed amendments would implement a new law designed to prevent consumer confusion in advertisements for “free credit reports.” The amendments also would address certain practices that may interfere with a consumers’ ability to obtain the credit report that credit reporting agencies must provide for free under federal law. Learn more…

File a Complaint

The FTC wants to hear from you if you paid for what you thought was your free annual credit report.

SPAM

The FTC also wants you to forward us any unsolicited emails you’ve received offering you a free credit report. Send them to spam@uce.gov.

AnnualCreditReport.com will NEVER send you an email solicitation for your free annual credit report or use pop up ads.

Tell me what you think about this method of monitoring your credit report in comments below.

10 Keys to a High Credit Score

Knowing how to keep your credit score above average is an important part of our financial health. Creditors want to see that you will be able to pay your debts back. There are a lot of things you can do, but often it is more what you don’t do that can have the greatest effect on you FICO score. Remember that it is important to demonstrate financial responsibility.

Here are the 10 Keys to a High Credit Score:

1. Don’t Avoid Using Credit. If you don’t use credit, you won’t have much for them to score you on. A history of showing the ability to mange debt will help with your score. In no way does this mean you should you max out all the credit cards you can get your hands on. Know your limits. If you have had problems in the past with spending to much on credit credit cards you might need to put away the plastic and make the majority of your purchases with cash or check. Limit the about of credit cards to two or three.

2. Don’t Miss Payments. Paying your bills late will hurt your credit, but if you miss a payment it will damage  it even more. If you try to make an extra payment in the next billing cycle it still will not remove the blemish from your credit history.  Paying your bills on time determines 33% of your FICO score.

3. Don’t Limit Loan Types. A car payment and a mortgage may not be enough. Also managing an installment debt, such as a credit card, is a good indicator of credit responsibility. This doesn’t mean you need to go out and sign up for every department store credit card out there. There are five elements to the credit score model and revolving credit, which allows consumers to charge and owe different amounts each month, is one of them. “It’s 10% of the score,” says Gail Cunningham, vice president of public relations for National Foundation for Credit Counseling.

4. Don’t Close Unused Credit Card Accounts. Actually, just use caution.  A factor in credit score models is your utilization, which is your debt vs. how much is available. For instance, if you owe $6,800 on a card with a $7,000 limit, you’re using most of your available credit and this utilization will have a negative impact on your score. Your available credit utilization is the second highest factor in your credit score. You should charge no more than 30% of your available credit.

5. Don’t Be A Credit Tease. Recent inquiries means that you or someone else has accessed your credit and this can affect your score negatively. It seems ridicules to me that your are docked for shopping around for a good loan, but credit checks can lower your score.

6. Don’t Rob Peter To Pay Paul. Don’t charge anything unless you know how and when you are going to pay it back. One of the benefits of credit is the ability to spread out payments on a big purchase, not to delay paying with hopes that the money will come in – from somewhere.

7. Don’t Get On The Call List. When a debt turns into a collection account, it’s an indication that you got yourself in hot water. Once a collection agency jumps into the arena, it becomes the owner of the debt, which will show on your credit history. Trying to make payments to the original debtor will not make the collection agency or the negative mark on your credit go away.

8. Don’t Forget The Little Things. That library fine you didn’t pay or the health club contract you signed but didn’t honor can show up on your credit report. Any debtor has the right to report unpaid bills to the credit bureaus, and many of them exercise that right.

9. Don’t Negotiate. On paying less than what you owe, that is. If you cannot repay a debt in full and a creditor agrees to settle for less than you owe, you haven’t won the battle. The transaction will be reported as a settled account and this will hurt your credit score. Instead of negotiating to lower the overall amount of the debt, ask to have your interest rate or monthly payment lowered so that you can continue to pay the debt off in full.

10. Don’t Give Up. If you have late payments, missed payments, defaulted loans, and similar credit mess-ups in-between, don’t give up and think that your credit history is ruined. Although offenses like these generally stay on your credit history for seven years, the recovery clock doesn’t start ticking until you have one full month of paying all of your debts on time.

Disclaimer/warning: If you have accumulated a large amount of debt and are looking to increase your credit score only so you can acquire more debt then you need to re-evaluate your strategy and way of thinking. This will only apply to very small portion of people. Most people won’t tell you this but you need to change your life style before you change your credit score. Maybe you don’t need that bigger house or nicer car. Perhaps you should learn to live within your means because if you don’t then you will merely upgrade into bigger financial problems as you go into deeper debt. I know that sounds a little harsh. Some might need a better FICO score to get housing, or buy a used car for transportation. Their are legitimate cases where force beyond your control you have gone into deep debt (i.e. medical emergencies, death of the bread winner in the family, etc. ) I understand that.  I only give this disclaimer because we here at Debt-Wrench.com are focus in eliminating the plague of bad debt in your lives. We feel strongly that without the shackles of financial obligation you can be free to live your life to the fullest. We must try try to rid or selves of all the sources of problems. The main problem is the credit card companies, banks, and lending institution.