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Free Annual Credit Reports

By: EconomyWatch Date: 25 August 2009

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The US Federal Law entitles every citizen to free annual credit reports, including students with credit histories. Students must diligently acquire and evaluate their free annual credit reports to ensure that they are devoid of errors. These reports can be requested for simultaneously or separately from the major credit reporting agencies, Equifax, Experian and TransUnion. Simultaneous procurement helps to compare the reports more effectively, while individual acquisition enables to space out the reports and get updated information periodically.

Free Annual Credit Reports for Students: Tips for Maintaining a Good Score

The first thing to do is acquire copies of your free annual credit reports, and evaluate them to look for deviations. If there are any variations, enquire about the reasons for the differences and dispute the case with the credit bureau(s). This can result in a significant improvement in your credit score.

Students can take the following measures to build and maintain a sound credit score:

Join another’s account: Students can become authorized users on their parents’ accounts. Every time the parents make a timely payment, the students score is also credit improved.
Open individual account: Students can raise their credit scores by applying for and managing an independent account. This requires charging the card regularly and making timely payments on it. Acquiring a high limit card is also beneficial for students, provided they keep the card balance less than 25 percent.
Make timely bill payments: This not only involves repayment of credit cards and loans but also encompasses utility payments, rent, fines and taxes.

Free Annual Credit Reports for Students: Implications of Bad Credit Score

Having a bad credit score can significantly alter a student’s ability to acquire loans and funding from private sources. Applicants with low scores will be subject to lower loan limits. Moreover, the loans extended to them might have narrower scope. For example, their loan-terms may only include tuition and not cover accommodation and cost of books.

However, students with low credit scores can take the following measures to get better loan agreements:

Approach a cosigner to collaborate on the student loan agreement. A cosigner with a good credit report can potentially lower the fees and interest rate on the loan.
Students can also acquire a better interest rate by agreeing to make payments while pursuing their education. This is because lenders are attracted by the prospect of receiving immediate payments.

If a student is denied a student loan, s/he must inquire with the lenders about the reasons. Sometimes, even making a separate appeal to the creditors leads to further consideration of the application.