Knowledge is power. This saying has always held true no matter what the circumstances. When it comes to finances, knowledge of their situation can give consumers the specific tools that they need to make real changes in their lives. As it stands, most of us are simply living day to day in a blur; the reality of our financial situation never really making itself clear. We swipe our credit cards, write checks, and go about our lives without really ever considering what we are doing to our financial futures or the shape we may be in presently. But by taking the time to know the truth about our finances, we are giving ourselves the best gift that we can give – and empowering ourselves to make the changes we need to make.

The very best way that consumers can continue to keep a check on their financial health is through the procurement of free credit reports on a yearly basis. Just as we go to the doctor’s office for a yearly physical examination, it is also necessary to turn our attention to our finances on a regular basis to make sure things are on track.

Luckily the government agrees. The Federal Trade Commission – in enacting their Fair Credit Reporting Act – stipulated that all consumers had a right to receive free credit reports once within every twelve month period. In accordance with this act a centralized website was launched that allows consumers to request their credit report from any or all of the three major credit bureaus - Equifax, Experian, and TransUnion.

Free credit reports allow consumers to see their credit score firsthand, as well as their credit history which includes any and all late payments, defaults, and bankruptcies. The information on a credit report is used by lenders to qualify applicants for loans; so it is vitally important for consumers to know what their credit report is saying about them. Discrepancies can be directed straight to the credit bureaus in writing, after which it is the responsibility of the credit bureaus to investigate the potential errors. If it is found after dealing with the creditors that the information is incorrect it must be removed from the consumer’s credit report.

Free credit reports help consumers keep ahead of what their financial record is saying about them. And just as importantly, it allows them to stay on top of potential identify theft – an important consideration in the modern world.

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