Finances are one of those things that tend to snowball. The worse it gets the more we tend to hide our heads; almost as if by not meeting its gaze its power will be somehow less. The reality, of course, is that financial strife does not go away simply because we ignore its existence; in fact, by avoiding it we are ultimately giving it power over us. Only by taking control, sitting up and opening our eyes to the reality of our situation can we even begin to start taking back the power and getting on our feet financially.

How does this process begin? With the use of free credit reports. Our credit report is what ultimately tells of our financial position; it is an accumulation of all of our financial decisions, good and otherwise, that has been collected, analyzed and reduced to a score. Sure, there are the details surrounding any late payments, loan defaults, and high credit card balances, but ultimately there is the credit score – that number that is used by potential lenders when making the decision whether or not to qualify us for a loan.

Lenders have access to our credit report but so do we. In fact, we are allowed free credit reports once within every twelve month period from each of the three credit bureaus that hold this information – Experian, Equifax, and TransUnion. By going to www.annualcreditreport.com we can request a free credit report from any or all of the credit bureaus so that we can familiarize ourselves with the current state of our credit report – and ultimately our financial health.

Armed with this information those in a tenuous financial situation can begin the steps necessary to dig themselves out of debt and improve their credit report. In the next post, we’ll discuss the next steps in improving your credit after receiving your free credit report.

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