Free Credit Reports

Although there are over a thousand credit bureaus, most of them are either owned or under contract to the three largest bureaus Equifax, Experian and TransUnion. And these are the bureaus who supply the free credit reports.

It's important to keep in mind that these three agencies don't share their information and so it's possible you could get slightly different free credit reports from each one. And what's likely, is that at least one of the three will have an error in it. When Consumer Reports made a survey of credit reports, they found that over 50% had at least one error. So if a creditor looked at an Equifax report that had an error but you'd only seen a TransUnion report without the error, you could be turned down for credit and not know why.

Correcting errors is just one reason to get free credit reports. Another reason that's become increasingly significant, is to guard against identity theft. A person who steals a credit card number or your Social Security number can open up credit accounts in your name and wreck your credit. The thief could also commit crimes with your assumed name, which could lead to your arrest. Because most people don't check their credit reports often enough, the Federal Trade Commission says that the average identity theft victim isn't aware of the crime until a year after it happens.

Another reason to get free credit reports is to check old accounts to make sure they're closed. If, for instance, you simply stopped using a credit card and didn't mail the card back, the account may still be open and count against your credit rating as a possible source of debt. And remember, just because an account is closed, it doesn't mean it's taken off your credit report. Negative items can stay on your report for 7 to 10 years and in some special cases indefinitely.