Top Vendors for Annual Credit Reports

A Guide to Annual Credit Reports

Annual credit reports are services provided by the U.S. government to allow consumers to track the credit information and concordant ratings assigned to them by credit bureaus.  It’s free, it’s easy, and it’s often in your best interest to consult them, so you can keep an eye on your score and make sure you’re not the victim of identity theft.  Let’s consider in more depth how they work and how they can work for you.

How They Work

When private firms began collecting data on consumer buying practices and debt history, the government began to intervene on behalf of consumers to assure that privacy and sound use policy were more stringently protected. 

The Fair Credit Reporting Act (known in the financial industry as the CRA) was the agency charged with carrying out the new body of regulations.  They’re one of three government bodies with oversight powers over the credit gathering and distribution industry, the others being the Federal Trade Commission (FTC) and the Office of the Comptroller of the Currency (OCC).

The CRA set up and maintains a website where consumers can gain access to the credit bureau data of the three major rating firms in the country: TransUnion, Equifax, and Experian.  That website – the only government-sponsored consumer credit rating database tool – is Annualcreditreports.com, where a person can look up what their score is and why.

How They Can Help You

Knowing your credit rating – and checking it often – is a good way of warding off the worst risks of identity theft.  This free tool allows you to do that, although there are of course more robust ones available to those who wish to pay for them.  Annual Credit Reports has the advantage of being carefully regulated and available to all.

If you’re planning on acquiring a personal loan, it’s the kind of information that you can use to gauge exactly where you stand – and what potential you have to grow as of this moment.  Remember, your credit rating is as good as currency in many ways, and a good one will allow you borrow large sums at low interest rates for appropriate ventures.  The information provided by annual credit reports is a good place to start.

How to Use Them

To begin, access their website and enter some personal data into the requested fields.  (It’s well encrypted by the government agency responsible for site maintenance.)  You’ll need your current and previous address, your social security number, and you may have to answer a few simple questions to confirm your identity.

Then the site will lead you into the databases of the three major credit bureaus, and each will provide you with their determination of your credit rating, based on a variety of factors and complex, often proprietary algorithms.  The number should thus be slightly different for each site, but it should also be in the same approximate range.

As the name of the site suggests, you’re only guaranteed one free check on your credit rating per year, so if you need more regular information than that, you’ll want to explore the for-pay options.

Conclusion

Annual Credit Reports offer you transparency and protection, as well as being an effective planning tool for the future.  Make use of it – after all, your tax dollars pay for it!