How to Use Your Free Credit Report

A credit report is an important tool to determine how your financial year went and what changes to make in the upcoming year. A free credit report is not only useful for you, but also for any financial institutions you request assistance from or sign a contract with, because the report shows your credit score, a simplified version of how trustworthy you appear to a company.

There is a lack of knowledge among credit card users which results in them not asking for the free credit report they are entitled to from the consumer agencies (Equifax, TransUnion and Experian). Financial advisors recommend you request one, and you can follow this guide to get full value from the document.

Free Credit Report

Trade Lines

The trade lines section in a credit report refers to all the credit accounts you opened, their history, performance, and the limit each has remaining. This information can be used to compare whether you are above or below the mark needed to pay off your debt to the companies extending your credit.

Request an updated credit report from each of the three major bureaus and compare information to check if they match and solidify the accuracy of data provided.

Error Checking

The major bureaus manage reporting for millions of people every month, so there is a chance of errors occurring. It is your job to ensure any mistakes are not carried forward, leaving a blemish on your credit score.

An example can be of your doctor whose office forgot to report a payment you made and that appears as a default. It is a good idea to contact the creditor first to ensure that the matter is resolved, and then reach out to the agency. These timely steps will help you in never being marked as an untrustworthy customer by other organisations.

If the mistakes are your own and your scores are lower than you would like, you can use technology such as Liabilities Robo-Advisor to help improve your credit accounts.

Pay All Bills On Time

Be sure to always pay all your bills on time. Late payments can show up on your credit report, so regular monthly repayments are critical.

Be aware that having too many credit cards, known as revolving lines of credit, is detrimental to your score. Also, requesting credit from too many companies in a short period of time negatively affects credit score.

Know the Impact on Finances

A good credit report and credit score can significantly help you to be approved for finance when you do not have immediate liquidity. A good report makes it more likely you are offered a loan at a lower interest rate, making servicing easier.

Whether you are issued a credit card from the bank depends on how reliable you appear to be as a client. To get a good deal with high enough credit limit, it is essential you show yourself as a valuable client. You need to be aware of your monthly cashflow to pay back the credit, so do not use hacks to obtain a credit card you cannot service later.