Knowing Your Credit History

If there is one subject I am very passionate about, it is debt. Since my husband and I began our journey out of debt in 2007, I have learned more about credit bureaus and how to read a credit report than I ever wanted to know. March just happens to be National Credit Education Month, which aims to keep people informed of their credit scores and how they can affect them.

I must confess that I am not particularly concerned with my credit score. After all, we don't even use credit cards in my family. But I am concerned with the contents of my credit report. Thankfully, it is very easy and FREE to obtain both a credit report and a score online. Let's explore why this is important.

Why You Should Check Your Report:

Checking your report regularly helps ensure that the contents are accurate. Identity theft is big business, and if you do not recognize something on your report it should be a huge red flag. A credit report lists all open and/or closed accounts along with your payment history and balances. This should match your personal records; if it does not, you can open a dispute to correct inaccuracies with just a few clicks.

A credit report also contains any liens, judgments or collections against you. This can affect one's ability to get a job, rent an apartment, or even obtain car insurance. Settling these infractions or having them removed entirely is very important.

If you do have debt, checking your report is actually a great motivator to get it paid off. Seeing all those numbers in black and white makes it crystal clear where you stand with your finances.

How to Obtain a Credit Report:

There are several online resources for getting an instant credit report. It is very important to use a reputable source that does not require you to enroll in anything with a credit card number.

I recommend both Credit Karma and Credit.com for quick snapshots and scores. If you just want a report, you are entitled to a free copy annually thanks to a federal law. All three bureaus must provide you with an annual report, no strings attached. I like to spread mine out quarterly between Equifax, Experian and TransUnion using annualcreditreport.com. This way I keep tabs on my report throughout the year, without paying for a costly monitoring service.

Keep in mind that the more you borrow money, the more credit history you will have. Debt is a slippery slope for many, so use credit wisely and only when absolutely necessary.