Information and tips as to how to handle your financial identity

Knowing how to handle credit reports is important. Your credit reports are your financial identity. Your credit reports can determine whether or not you get a credit card or loan, and how much interest you have to pay. Sometimes, a credit report can even determine whether or not you get a job or an apartment. For these reasons, you need to keep close track of your credit reports and what is on them.

Three credit reporting agencies-TransUnion, Experian, and Equifax, handle your credit reports. The first step to keeping on top of your credit reports is obtaining free copies of your credit reports at least once a year. You can receive free copies of your credit reports by going to www.annualcreditreport.com. Once you have received your credit reports, look them over carefully for inaccurate information. You will want to check several things.

First of all, make sure your personal information such as the spelling of your name, your address, your employment information, your social security number, and your date of birth are all correct.

Next, check over the creditors listed on your credit report. Are there any creditors that you don't recognize? A friend of mine once got a copy of her credit reports and noticed that a creditor had reported her for defaulting on mortgage payments. The problem? She was a lifelong renter and had never had a mortgage. Another person I know discovered that her credit report listed several credit cards that she did not have. In both cases, these people had become victims of identity theft, but they never would have known it, had they not checked their credit reports.

Once you have ascertained that the personal information on your credit reports is correct and that you recognize all the creditors listed on your credit reports, make sure that the information about how you are paying your bills is accurate. For instance, if you pay on time every month, make sure that your payment status is listed as "never late" or "pays as agreed."

Also, check the status of your accounts. If you've closed an account, make sure the account shows up as listed closed instead of open. If you've paid the account off, make sure it shows up as "paid off" and not "charged off."

If you do find errors in your credit report, it's important to challenge them immediately. You can do this in one of two ways. First, you can approach the credit reporting agency directly. If you do this, you will need to put your challenge in writing and include copies of any proof that you may have. For instance, if they have your home address listed incorrectly, send a copy of a utility bill or some other document that provides the correct address.

Another way to challenge incorrect information is to go through the creditor. This can be done either with a phone call or in writing. Explain the error and ask the creditor to correct the information with the credit reporting agency. Once you have carefully examined your credit reports, dispose of them by shredding them.

Learning how to handle credit reports is an important part of managing your financial life. Credit reports can positively or negatively affect your ability to get credit, and it is important to ensure that they are accurate and complete.