Monitoring your credit score is one of the most important things you can do

Americans are identified by certain numbers: age, social security number, income, even a street address. Often these are just numbers, and don't reveal much about identity or history. However, one number which identifies all of us and, unfortunately, many people may not know it: is our credit score. A credit score is the measure of credit risk calculated from a credit report using a standardized formula. A higher credit score compared to a lower credit score indicates to lenders that the person with the higher score is less of a risk when deciding to loan money.
Credit scores most likely will be reviewed by a lender when applying for a car loan or mortgage. What might be surprising is that a credit score may also be reviewed when a person applies for car insurance, inquires about a rental property or even applies for a job. Because credit scores are reviewed for so many different purposes, in some instances without your knowledge, it is a good idea to review both it and your credit history, which is used to determine your credit score, periodically.

Monitoring your credit score and credit history from time to time allows you to monitor any changes and, in the event that false information is included in your credit history, have the false information stricken from your record. The Fair Credit Reporting Act requires each of the nationwide consumer reporting companies - Equifax, Experian, and TransUnion - to provide you with a free copy of your credit report, at your request, once every 12 months. To request your report online go to www.annualcreditreport.com or link to that website from the Federal Trade Commission's website, www.ftc.gov.
If, after reviewing your credit history, you believe that someone has obtained credit using your stolen identity or, if you lost your wallet and you think someone may use the information to steal your identity, you may wish to subscribe to a credit monitoring service. This service may provide you access to your credit score, provide you notice when credit is applied for using your personal information and has the ability to "lock" your credit so no one can obtain new credit (including you until you "unlock" your credit).

You may be eligible to receive credit monitoring services for a limited time at no cost. Recently, TransUnion agreed, as a part of a preliminary lawsuit settlement, to offer free credit monitoring to those individuals who had an open credit account or open line of credit from any lender from January 1, 1987, to May 28, 2008. This group includes those individuals who had a credit card, car loan, mortgage, student loan or any other loan. The lawsuit claims that TransUnion violated the Fair Credit Reporting Act by selling lists with consumers' personal and financial information for marketing purposes, a practice which TransUnion has discontinued. For more details about the preliminary settlement, and to select one of the several settlement options listed in Summary Notice, visit www.listclassaction.com or call 1-866-416-3470.

As your credit score affects most financial aspects of your life, knowing what it is and, possibility monitoring it, may help you save money when you buy your home or obtain insurance. You may want to consider taking advantage of the opportunity to receive a free credit report, and for some, free monitoring services.
The advice in this column is general in nature. Consult your attorney for legal guidance to fit your particular situation.

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