In the twenty-first century, there are few documents that have a greater impact on the lives of Americans then their credit report. Credit rating determines ones ability to buy a home, a car, or to obtain a credit card or a job. Since these things are important, it is equally important that the information be accurate. The only way to be sure of that is to check the report regularly. Prior to last fall, there were two ways to obtain a copy of your credit report: to pay for one, or to obtain one for free after being denied credit. Thanks to the Fair Credit Reporting Act passed last year, Americans can now obtain a free copy of their credit report from each of the three credit reporting agencies once a year.

Due to anticipated heavy response to the offer of free credit reports, the program has been rolled out in stages. People living in the West and Midwest are already eligible to apply for a copy of their report at www.annualcreditreport.com. As of June 1, 2005, those living in the Southeast are now eligible, and on September 1, 2005, those living in the Northeast will be eligible. All that is required to receive a copy of your credit report is to answer a few simple questions. Since it only takes a few minutes to do, there is really no reason to put off checking your credit report, and you may benefit tremendously by doing so.

The credit score is a single, three digit number that represents an individuals credit worthiness, and that score is obtained through a complex formula that takes into consideration a persons borrowing and spending habits and payment history. A high score makes someone more eligible for loans and credit, while a lower score may indicate that a person is a risk to repay. While the information contained on a credit report is generally accurate, incorrect information sometimes shows up on credit reports, and incorrect information could result in someone who being denied a loan for which they might otherwise be qualified. Furthermore, a credit report check is the best way to determine if you have been the victim of identity theft, an increasingly popular crime that often goes unnoticed for a year or more. If your identity is stolen, your credit rating can be ruined and you can be burdened with thousands of dollars in debt. The new bankruptcy law, which goes into effect in October 2005, draws no distinctions between debt incurred by an individual and debt incurred through identity theft. This alone should be reason enough to check your credit report regularly.

Since the law now allows individuals to obtain one free report per agency per year, anyone who wants to keep a close eye on their credit report can obtain a free report as often as every four months. Since the credit report affects your life in so many important ways, checking it regularly should become a habit.

Charles Essmeier

Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites on the topics of debt consolidation, home equity loans and automobile lemon laws.