Myths Uncovered – Free Credit Reports

Free Credit Reports are important because depending on their content, they can cost or save you money. If they contain negative factors, or are incorrect, then you will find it hard to obtain credit in the first place, and if you do obtain it, it will be at higher interest rates.

A credit report contains key information about your credit history, which lenders use in association with your application details to assess how much of a risk you are, and if they lend to you will you pay back in full any credit. In the current economic environment, lenders are very keen to avoid bad debt, so have become even more cautious about who they lend to. Free Credit Reports are created and updated by the UK three main credit reference agencies, which include Experian, Equifax and Callcredit. When you apply for something, your credit file can be checked with your permission, checks can be made when you apply to rent a house, store credit, apply for a job, apply for a finance product such as car finance, loans, mortgages, credit cards etc, so your credit report impacts all parts of your life!

The top myths surrounding Free Credit Reports: - Individuals can access their credit report (not just lenders and financial institutions), you have more than one credit report, as one is compiled by each credit reference agency.

- Nothing is Free - Free credit reports are actually first month free credit reports, with recurring monthly payments after the first month. - There is no blacklist of consumers, who should be refused credit. - Individuals do not have one credit score or rating, lenders work out your score every time you apply for finance. These score can differ between different products, you are applying for, for example credit cards versus loans. Lenders understand the profile of an excellent customer and use your application details and credit report to mark you against this.

- Looking at your report, does not count as a search or footprint on your credit history. - The credit reference agency does not dictate whether you are accepted or not for a credit application, the company you are applying to makes the decision. - In an application it is not just the credit report content, which is considered, the lender also looks at your application details. - Your report, does not contain details including, salary information, employment status, criminal records, employer details, any savings accounts you have.

Credit debt Settlement - How do I avoid collections? To stop the bank from sending your account to collections, you must start your negotiations at 150 days before the charge off date. This will avoid the debt from being charged off and going to collections, and you will be able to strike a better deal with the original creditor.

If you check your statements regularly One easy step that can help you determine if your credit card has been "stolen" or used by third parties without your permission. You have to watch for any charges you do not remember how or changes in credit rating does not reflect the performance of credit risk you've had since the last time you checked your report.

Before calling up the creditor or collector, review this article for a second time, and use whatever information you need to put you in a better position to start negotiations. Remember creditors and collectors are experts at negotiating bills, so do not give them the upper hand by not being prepared. Now that you are empowered with more information, go out there, and take action.

Harris Smith offers advice on home equity line of credit and obtaining credit
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