If you are reading this, you probably already know the importance of getting your hands on your free annual credit report and checking it at least annually, but you might be asking yourself, where do credit reports come from and who keeps track of this stuff? etc. If so, you’re not alone.

Fortunately, this is quite easy to explain. Currently, there are three major credit bureaus, all from the private sector (non-government operated) who keeps track of the credit history of everyone that has a social security number or have any sort of credit history. These companies are Experian, TransUnion, and Equifax.

In a nutshell, each one pretty much does the same thing, just with some minor differences in the information contained and organized. To get a complete picture of your credit history, if you have all three free annual credit reports you have pretty much all you need to know about your credit history.

Now, under the Fair and Accurate Credit Transactions Act (FACT Act) from the government, you are entitled to a free credit report every 12 months from EACH of the three major credit reporting companies/bureaus. This is your right. And to get your three free credit reports, simply go to annualcreditreport.com and sign up there.

Again, keep in mind that the FICO score, which is what many potential lenders will look at, is not a part of the free package, and when you sign up for the 3 free credit reports you will be asked to pay a reasonable fee for the FICO score as well. Another way to obtain your FICO score is to do a credit monitoring service trial and you will get one free annual credit report from each of the three bureaus as well as the FICO score for free whether you keep the service after the trial period or not. Click here to find out more about a reputable credit monitoring service.

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Here’s a fun picture I found on credit freeze. You know, the situation where your credit on a particular credit card is frozen due to identity theft? Luckily, when you call in to verify everything, the freeze if lifted and you are able to transact again! This picture says it all…

Originally uploaded by paalia

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There’s a lot of confusion about this. While it should be obvious to most people by now that the law gives us free access to our credit reports on once a year from each of the three major credit bureaus, not everyone knows about it much less know how to get it exactly!

It’s really quite easy. To see your free credit reports (all three of them) with no strings attached, simply go to www.annualcreditreport.com and follow the simple directions and within a few minutes, you will have all three credit reports on your computer! Or for those of you who want hard copies, the website will tell you how to get it too.

If one set of the three credit reports once a year is all you are looking for, do NOT get it from any other sites, as you will have to pay for them. On the flip side, whenever you purchase the reports, typically you get to see the reports as often as you like during the year, in case you want to monitor the activities a little more closely than the average person.

The other scenario is where you’d get your free credit reports + FICO score when you sign up for a credit monitoring program. Most have trial offers and you are not obligated to continue after the trial period if you don’t want the monthly service. The reason this might be a good way to go is because you can end up getting the FICO score for free too.

There it is, the simply answer to how you get your free credit reports.

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You probably know by know that having a good FICO score (derived from your credit reports) can determine how low or high of interest rates you will get when you take out a loan. But just how bad is a bad FICO score? And how much can it affect you?

According to the Web site myFICO.com the breakdown of the general population’s FICO scores is as follows:

* 20 percent below 620
* 20 percent between 620 and 690
* 20 percent between 690 and 745
* 20 percent between 745 and 780
* 20 percent above 780

Yes, a good percentage of the folks out there actually have FICO score uner 620! Some are as low as the 300s. Ouch, imaging trying to get a loan at all with that.

On the flipside, an equally good percentage of people have superb credit scores which is anything over 780, and that’s about the highest tier you can go. A few people out there actually have around 900 but that is virtually nonexistent!

The bottom line is, stay the heck away from the 300s (very rare as well), and strive to be near the mid 700s and above. You’ll end up saving a grip of money!

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Most people today know that the US government has worked out a deal with the three major credit bureaus of America to each provide an annual credit report for every person with a legitimate social security number.

Originally uploaded by Alec Peden

This is a great thing for everyone. For one, we can all view our credit reports once a year to make sure everything on it is accurate and that there are no credit card and other loans there that we did not authorize. And if we do find something odd on these reports, we can take appropriate actions.

I’ve personally claimed my three credit reports and am very please with the process. Well, technically only two came through because one of them didn’t allow me to get it online at the time and I just didn’t bother with it. The site was easy to use and delivered what uncle Sam promised.

There is one thing missing though. The FICO score. This is a numerical number calculated from the data on your credit reports and is just about the first thing potential creditors will look at when deciding whether you qualify for a loan at a particular interest rate, or your credit worthiness level.

Typically, this is a separate item you can purchase though any of the three major credit bureaus as well through a variety of its resellers. Sometimes it comes bundled with other financial products.

So, when you are looking to check your credit history, be sure to get your three credit reports and your FICO score so you can know the whole picture!

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Want a free credit report? How about getting three free credit reports? What about the FICO score that everyone seems to be talking about?

Image originally by Mareen Fischinger

This whole credit report and FICO score thing is quite simple. In a nutshell, you need to see your credit report(s) periodically to make sure there the information is correct on it and that you do recognize all of the outstanding loans and debts on it. And you also need the FICO score as it is the 3 digit number (derived from the data on the credit reports) that quickly tells a potential lender how credit worthy you are.

Now that you know what you need, the next step to finding out the best way to get them. This is also very simple.

Method Number One - In case you don’t know already you can get your three credit reports (one from each of the three major credit bureaus) by going to the government backed site www.annualcreditreport.com where you can instantly view up to three credit reports simply by signing in and filling out a simple online form. Now do keep in mind that the FICO score is not included through this program, and you’ll have to purchase the FICO score separately during the sign up process or on your own at another time.

Method Number Two - Knowing that you need both the credit report(s) and FICO score for your credit reviewing process to be meaningful, you can also sign up for a trial credit monitoring offer and receive not only the credit reports, but the FICO score for free as well.

Typically, the credit monitoring service can be very useful if you have been a victim of identity theft, as it automatically monitors new activities on your credit report and alerts you. This way if the identity thief tries to open a new credit card with your name and social security number, you’ll know about it very quickly and be able to protect yourself. And if you do not feel like this service is valuable to you, you are still free to cancel the trial membership within the trial period and you won’t be billed. The credit reports and FICO score would be your to keep.

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