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Credit Reports are Not the Enemy!

The dreaded credit report that is what most people think of them especially if they are in financial hot water. The fact is the truth is always your friend, even when it is not so pretty. The only way you are ever going to stop the bleeding and recover financially is to have an exact picture of your credit status. This essential information is available to you and any potential lender, on your credit reports.

In the United States, these reports are maintained by three major credit agencies: Trans Union (www.transunion.com), Equifax (www.equifax.com) and Experian (www.experian.com). You can visit their websites to get contact information such as phone number and mailing address.

These reports will contain nearly every credit transaction you have participated in for many years. It will show if you were ever late and exactly how late you were, 30 days, 60 days and so on. Credit reports will list several past addresses if you have them and often your social security number as well as phone numbers.

This private information is available to certain qualified parties, banks, mortgage brokers, credit card companies, financing company and certain others if they are for legal proceedings. All three-credit agencies do their best to maintain good records, but it is possible for the reports to contain errors.

There may be loans that you have paid off still showing as active. They may have an old credit card on file that you cut up and canceled months ago or they may not accurately reflect the payments you have made to catch up past due accounts. Many times this is not sloppy book keeping but simply timing, or human errors. The entire world might seem connected to a computer but that does not mean the databases play nice together, particularly if the companies have different systems.

Your only defense in these situations is to get and review copies from each agency frequently. Go through it with a fine toothcomb and note any errors, find your documentation that proves otherwise then mail all of it into the company via registered mail. Be sure you ask them to correct the errors as soon as possible.

Changes in legislations have freed all Americans to obtain one free credit report per year from each company. You can do this in a number of ways, in writing, by phone or through an online form. One possibility is to visit: annualcreditreport.com.

Once you have this information in hand you are ready to begin planning for the future, a debt free one. But first you must understand your past credit history. Then you are free to take the important steps to create your debt free plan.

After you have cleared the errors on your report, you need to note any past due amounts. Take care of these first and do it as soon as possible. A good method to employ then is to pay off the smallest debt first and then move up the line through your debt. This will snowball your payments and before long, you will be at the top of your mountain of debt looking down at how far you have come.