Did you know that your credit report score is the sole piece of information that loan and credit card companies use to determine if they will extend you credit? Do you know what your credit score is?

Your credit report score is based on a number of things.  For example, if you have never had a credit card or a finance company or bank loan, your credit report score will be low because you have no history of credit. It will also be low if you have ever been 30 days or more late with a credit card or loan payment.

Your credit report score will be high if you have open (or closed) accounts that have a history of on-time payments and the accounts stayed open for at least 6 months. The better your credit report score is, the more likely you are to be able to finance a new car or buy a new house. An example of a good credit report score would be somewhere in the 700’s. A bad credit report score would fall below 600.

Keep in mind that every time you let someone check your credit report score, points come off of it.  It is only a few points at a time, but if you give your permission too many times to have your credit report score checked, it could make a significant difference in what that score will be.

To keep your credit report score within a good range, make sure that you make all of your payments on time. If you have a chance to pay a loan off early, that’s great. Just keep in mind that it looks better for you to keep it in good standing for six to eight months before paying it off. Try not to overextend yourself with credit card payments or loan accounts. Even if they are in good standing and your credit report score is high, some companies hesitate to loan money they feel you may not be able to pay back.

By keeping a good credit report score, you are ensuring that your future ability to buy a home or a vehicle, or even send your child to college, will be one less thing that you  have to worry about.

Even with the news full of identity theft stories, there are still individuals that choose not to check their annual credit report. Most people don’t feel that they are at risk, that identity theft only happens to other people. There are many others out there who would beg to differ. Your annual credit report gives you an opportunity to make sure that your credit report is correct and that no one has applied for credit in your name or with your social security number.

Thanks to new legislation that recently went into effect, you can receive your annual credit report from all three agencies free of charge. To do this, simply contact the agencies in writing and request your free annual credit report or go online to their websites to request it. The three major credit reporting agencies that you can receive your credit report from are Equifax, Experian and TransUnion.

Once you receive your annual credit report, you need to take the time to review each one and verify the information. Your credit report will tell you all of the credit accounts that you have open, whether you have any late payment history, a recent history of any judgments that have been made against you, and your address and employment history. If there are accounts or judgments that you do not recognize in your annual credit report you should write down the information and contact the credit reporting agency as soon as possible. These are all signs of identity theft.

You cannot underestimate the importance of your annual credit report. Your credit score is based solely on the information in your credit report, and a bad score could keep you from financing a home or a new vehicle. By checking your annual credit report you can keep track of what is going on with your credit and whether someone has stolen or tried to steal your identity. Even if you know you have bad credit, it is still a good idea to request an annual credit report. Though companies do what they can to verify identity, there are identity thieves that know their way around the verification process.

Reviewing your annual credit report may not stop identity theft, but it gives you one of the tools that you need to stop it quickly if your identity is stolen.