Checking your credit report every year is one of the best financial practices out there. However, there is something critical missing on these reports you may need to know.

Getting your free credit report from www.annualcreditreport.com allows you to ensure the accuracy of your report. It’s also the best way to find out if someone hijacked your identity and applied to open credit under your name.

However, the free report doesn’t include your credit score. That number is the key to opening new credit at good rates. You can get your credit score from one of the three reporting agencies, but not for free. In most cases, these services will try to tie the score to an ongoing monitoring service, so be aware of what you’re signing up for.

Since getting your credit score costs money, when does it make sense to check it? If you plan to make a major purchase which will require credit (e.g. a car, appliances or a home) within the next year, you may want to get an early look at your score. Your score determines whether you will qualify for the credit, and it can also impact the terms you are offered.

What can you do to improve your score? Two main factors constitute two-thirds of your credit score: amount owed on credit and your payment history. By reducing your balances and making sure your payments are always on time, you can have a favorable short-term impact on your score.

For more detailed information on credit scores and the role they play in securing a loan, check out our page on Credit Scores.

Below are links and phone number for the three major reporting agencies:

www.experian.com Phone: 1-888-397-3742

www.equifax.com Phone: 1-800-685-1111

www.transunion.com Phone: 1- 877-322-8228