Cleveland - Payday Loans, Cash Advance Lenders

How and Why to get a Free Credit Report

One's credit report has a function almost akin to currency in today's economy: It determines, in part, how much capital an individual may access via lending products and what types of lending for which that individual will be eligible. A free credit report is often offered as a bonus service before one signs up for a regular, pay-to-view, credit report being delivered at regular intervals. Federal law, however, allows consumers a free copy of their credit report under certain circumstances and keeping apprised of what's on this document is a good financial policy for anyone.

There are three reporting agencies from whose data one's credit score is generally calculated, though some providers may use only one or two. A free credit report may either represent a collection and averaging of the data provided by these agencies or may represent the version of one's borrowing and payment history gleaned from only one of the sources. The report will show the amount of outstanding debt the individual holds, any past-due or delinquent accounts and any collections activity taken against the individual. From this simple and hardly complete tally of one's financial history, one's financial future is quite often determined.

One can get a free credit report once per year and on each occasion that they're denied credit. The idea here is that a person has a right to check what these agencies are saying about them once per year, at the agency's expense, and every time a lender decides that a consumer is not worthy of a certain type of lending. This is designed to allow consumers to dispute what's on their credit report or to simply know why they're not eligible for a certain type of lending. What's on the credit report is something every consumer should know.

A free credit report sometimes will contain entries the consumer doesn't even recognize. The first thing to consider is whether or not one had an account go to collections. The collections agencies typically buy the debt for pennies on the dollar and then go about collecting the debt from the consumer. Of course, this means the original creditor will not appear on the credit report if this is the case. Remember these reports go back up to ten years so a mysterious entry may just represent a debt that's been forgotten over time.

A free credit report can help a consumer identify mistakes that may be costing them access to funding. Some of these mistakes can be rather bizarre: loans which one never took out; collections accounts which never actually went to collections; past-due reports on a loan that has never been paid past-due. Such occurrences are not rare enough and can be very difficult to remedy. Fortunately, not all forms of lending are dependent upon credit reports and have more to do with how much money one actually makes and what wealth one actually has then the arbitrary number assigned by credit reporting agencies.

A free credit report generally won't have any history of auto title or payday loans. This is because these sort of lenders generally don't make use of the credit reporting system and simply make loans based upon their client's income. In the case of auto title lenders, the loan is made based on the resale value of the car offered as collateral. For individuals who may see things on their credit report that are sure to cause them hassles where getting funding is concerned, these lending products are a convenient and increasingly-popular solution. The straightforward manner in which they're given reflects the straightforward terms of the loan.

Unless one of the loans goes to collections—remember, they are real, legal obligations that need to be taken seriously—one need not worry about them being misrepresented on a free credit report or, for that matter, any other financial reporting device. These loans are fast, convenient and much less complex than other financial products on the market. Their simple design also allows them to be less of a pitfall than other types of lending. Credit cards, for instance, are essentially designed as an inescapable debt trap. Payday loans and auto title loans are designed to be paid back quickly, not over a series of years at 30-plus percent interest.

All that one generally needs to receive payday and auto title loans is proof of employment, income, a bank account and an ID. No free credit report need be checked before going into the office to make sure one isn't embarrassed by being denied. While credit report scores may be in freefall as the economy contracts and recovers, these lenders are still doing business and are much more likely to allow everyone access to their products, even if their credit report betrays some hard times.