Understanding Credit & Obtaining Free Report

Posted on January 25, 2021

by Daphne Bechrakis

Imagine for a moment that an adult is applying for a credit card with a new bank. They already have a credit card with a different bank and racked up some credit card debt when they were young, but they have paid off that debt after a few years. The fact that they didn’t miss any payments and completely paid off this debt is shown by their credit report, which is one of the things the bank looks at when this person applies. Seeing this, the bank approves the new card. This is just one example of the many times a business may access a person’s credit report when deciding to provide services to them or not. Credit is an important part of being an adult that often comes up frequently throughout a person’s life and we often hear things about good or bad credit can affect a person in a number of ways.


What is a credit report?

Your credit report is a report that gives a snapshot of your financial situation, such as how many credit cards you have, how much debt you have and your history of paying off that debt. Credit reports and credit scores are not the same thing, although they are very closely related. Credit reports are a much more detailed history of your financial accounts and debt than your credit score, which are three digit numbers used to determine the likelihood that you will pay back a loan on time. Your credit score is calculated by the information in your credit report, which is one of the reasons your credit report is so important. 


Why is it important?

Your credit report is an important piece of information that lenders or other businesses check to assess your financial status. It might be checked by landlords before you rent a new place, or by banks when you take out a loan or open a new credit card. Even more importantly, regularly monitoring your credit report can help you detect early signs of financial or identity fraud, for example by spotting loans or bank accounts in your name that you haven’t opened. Catching fraudulent financial accounts early can help prevent you from being held accountable for debt someone else is racking up in your name. 


Where can I find my credit report?

Credit reports are issued by credit bureaus. These bureaus, also known as consumer reporting agencies, are non-government companies that compile your financial information from information submitted by credit card companies, lenders, or other financial businesses. Under law, people in the United States are allowed to get a free credit score report from each of the 3 major credit bureaus (Experian, Equifax and TransUnion) once a year. However, you can now get free credit reports every week from each of the 3 major bureaus until the end of April 2021. You can request each credit report by going to AnnualCreditReport.com, which is the authorized source for free credit reports. For other ways to acquire your free credit score, check out Consumer Financial Protection Bureau


What resources does the library have available?

Nolo’s Credit Repair guide. 

Credit scores & credit reports: how the system really works, what you can do
by Hendricks, Evan

Your Score: An Insider’s Secrets to Understanding, Controlling, and Protecting Your Credit Score by Anthony Davenport.

Daphne Bechrakis

Daphne Bechrakis

Daphne is a Public Services Librarian and Harry Potter enthusiast. In her free time, she enjoys reading, adding books to her ever-growing “to-be-read” list, hiking, and watching terrible movies with friends. One of her current life goals is to collect the entirety of the Discworld series by Terry Pratchett. Her bucket list includes seeing the Aurora Borealis and going to Yellowstone National Park. She is the proud owner of a spider-plant named Skullcrusher III, first of its kind, which she has somehow managed not to kill yet.
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