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If you are trying to avoid a bad credit rating, one of the most important preventive steps you can take is to request and analyze your credit report. Credit reports summarize your credit history usually for the last seven years and are usually detailed with information about active credit cards you have, mortgages, and any other loans you have outstanding. Depending on the credit information that the credit bureau receives will determine your credit score

There are three large credit bureaus that compile lending information and calculate a score for each individual. The three credit bureau companies are Experian, Expedia and Trans Union. If you want to improve your credit rating or make sure credit score is accurate, it is important that you request a credit report from either one credit bureau or all three of them each year.

Most states have enacted legislation that enables an individual to request a free credit report each year. Other states may require you to pay a small fee, usually $10 or $15. Once you receive your credit report it is important for you to go over the report to make sure your credit rating is accurate. Most credit reports usually have an information booklet that goes over how to read your credit report and will list example reports for increased understanding. You can then view your credit report and make sure that the information is factual.

From time to time, there may be discrepancies listed in the credit report. This may be due to inaccurate reporting, identity theft or fraud. If you analyze your report and notice a discrepancy it is important for you to contact the credit bureau immediately as well as the lender that has reported negatively to the bureau.

It is also important to analyze your credit report to determine if any credit cards or loans have been taken out without your knowledge, this usually points to identity theft or fraud. If you are looking to improve your credit rating or would like to protect yourself from theft and fraud, request a credit report annually and analyze it thoroughly.