What exactly do you get in a free credit report ?

In this article we will discuss the misconception of free credit reports. There are lots of advertisements out there saying get your free credit report. But what exactly does a free credit report come with? I have personally seen about 3 different types of credit reports being advertised out there.

The first type of credit report is the credit report where you only get a credit report from one of the bureaus. There are 3 bureaus, and they are Equifax, Trans Union, and Experian. Typically the offer includes a report only from one of these bureaus. You might ask yourself how does this help me, and the answer is it does not help very much. The reason is since there are 3 bureaus, and they all report somewhat different information; you might want to get a credit report from all three bureaus. This is called a tri-merge, or a 3-1 credit report. In other words you get one report with all three bureaus and what they are currently reporting about you in regards to loans outstanding with your creditors.

The second type of credit report is the 3-1 credit report with credit score. This is somewhat better; you get all three bureaus reporting your information along with only one of the agencies giving a score. Well you might ask yourself again, what is the advantage and disadvantages of this type of credit report? Since there are 3 bureaus reporting your credit, it would only make sense to get all 3 scores since that is what most lenders look at. Mortgage companies pull your 3-1 credit report with all three scores and typically use the middle score for qualifying purposes. If this is the industry standard in the qualifying process, shouldn’t you see the same report? I would have to say yes.

The third type of credit report is the 3-1 credit report with all 3 scores. This is the best type of credit report, because it is what lenders look at. Most people out there getting a free copy of there credit reports are not really sure what they are getting. Annualcreditreport.com advertises that you are entitled to a free copy of your credit report once a year, but fail to mention you don’t get your scores. It is in your best interest to get your credit report with all 3 bureaus and all 3 scores, especially since this is what most creditors look at in the determining process for lending you money.

Here is the break down for credit scores and how they are classified for mortgage:

• 780-850 – Low Risk

• 740-780 - Medium –Low Risk

• 690-740- Medium Risk

• 620-690- Medium High Risk

• 620 and Below – High Risk or “Sub-Prime.”

With all of this being said, it obviously makes more sense to get your 3-1 credit report with all 3 credit scores. Especially since that is what creditors are looking at. When pulling a consumer credit report it does not affect your credit scores.