Did you know that under the 2003 Fair and Accurate Credit Transactions Act, every American could obtain a free copy of one of the most vital consumer documents? It's your credit report and there are three primary credit bureaus that provide them: Equifax, Experian, and TransUnion. You can get a free copy of your credit report from each of these firms once a year. All you need do is ask. Go to www.annualcreditreport.com.

Keep in mind that whenever you borrow any money, whether for a car or mortgage loan, or even by using a credit card, the lenders report your payment history to these credit bureaus. Lenders generally use a risk-based modeling to decide whether they want to extend any credit to you as well as the terms of any loan. The better you score, the better it is that you will get a more favorable rate. Why? Simply because lenders can offer people with high credit scores better rates that those with low scores. Stands to reason. It's all based on risk.

Of course, carrying a balance generally isn't good financially but it does show lenders what your ability is in managing credit. Pay bills on time, keep balances low (usually no more than 50 percent of the available credit line), and you may find yourself with a good card score.

What the credit report does is contain in one place a history of you as a borrower of money. It has a complete rundown of all your payments, whether for the house, credit cards, auto loans...whatever.

Besides going to the Web site mentioned above, you can call a toll free number and request a report. That's 877-322-8228. Or, you can obtain a copy of a brochure entitled Annual Credit Report Request from the FTC and on the back of it complete the form and send it to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, Ga. 30348-5281.

Remember, this is all free.

Listen, credit card companies do quite well on late fees, over-the-limit fees, and by raising your interest rate. A late payment can easily raise the interest on your credit card.

Incidentally, so that there is no misunderstanding, this new Act doesn't replace certain other ways you are entitled to a free credit report. If you've been denied a loan, insurance policy, or even a job based on your credit report, you're entitled to see that report absolutely free. It also applies if you're filing for unemployment or to receive public assistance.

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