Here’s what I love about the Fair and Accurate Credit Transactions Act (FACTA) of 2003: it allows us to stay on top of our finances free of charge. Now here’s what I don’t love so much: too many Americans don’t know how important checking their credit report is!

What is a credit report?

Basically, it’s a record of your life as a borrower and includes information on your credit card accounts, car loans, home loans and more. Lenders of all sorts report information about you as a borrower to the three major Credit Reporting Bureaus (Equifax, Experian and TransUnion) and those bureaus compile a report for every citizen.

Reports include information like age of accounts, late payments, interest rates, etc. Many lenders calculate your credit score largely based on the information in your report.

Beware the Scams

FACTA outlines that every American is entitled to one completely free credit report each year from each of the three bureaus (which means three reports per year). The only Web site where you can take advantage of this is www.annualcreditreport.com. Other sites with catchy names offer “free” reports, but come with hidden subscriptions and costs that you don’t need.

How to Get the Facts on Your Credit

• First, either visit the site above, call 877-322-8228 or send away for a report by writing to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. This Fair Trade Commission site has more details.

• Choose to view one of your three credit reports (from Equifax, Experian or TransUnion). I like to look at a different one every four months – that way, I have an idea throughout the year of where my credit stands.

• Check all the information on the report against your records. If you see any inconsistencies, follow the directions on the Web site or the forms to file a complaint.

Staying on Top of Your Credit Report

Mistakes on your credit report can harm you – inaccuracies can lead lenders to charge you higher interest rates or even deny you loans you would otherwise qualify for. Plus, checking your report regularly is one of the only ways you’ll know if someone has tried to steal your identity.

It’s especially important to keep up with your report after you file bankruptcy. Make sure that creditors aren’t still dinging your report for debts that were cleared long ago.

Checking your credit is fast and free, so click on over to annualcreditreport.com and find out what your credit looks like.

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