Minnesotans may order free credit reports

Beginning this month, Minnesotans may order a free credit report about themselves and find out what has probably been interesting reading for others.

Credit reports detail how individuals pay their bills along with personal identification information, public records such as bankruptcies and a record of inquiries for the report. The credit report is used to evaluate applications for credit, loans, insurance, employment and home rental or ownership. The report may be used to determine loan interest rates. Better credit histories and credit scores mean more favorable interest rates for individuals.

Previously getting a credit report came with a fee and checking it too often was frowned upon. With the emergence of identity theft, individuals are advised to check their credit to assure the rating reflects their payment history and not someone else's.

Free credit reports

To request free annual credit reports:

Go online to www.annualcreditreport.com.

Call toll-free at (877) 322-8228.

Fill out and mail an Annual Credit Report Request Form, which is available online at www.ftc.gov/credit or by request from the Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.

The Fair and Accurate Credit Transaction Act of 2003 created a wave across the nation with various sections of the country gaining access to the free reports beginning with the West Coast on Dec. 1, 2004. Now the Midwest has joined the tide. Minnesotans may obtain a free credit report each year from the three major U.S. credit bureaus -- Equifax, Experian and TransUnion.

Lutheran Social Services notes credit reports almost always have errors, which is reason enough to review them annually. LSS suggests staggering the reports from the three providers in order to check for changes during the year.

Credit scores may range from 300 to 900. The University of Minnesota Extension Service reports the average score is about 700. LSS reports lenders consider the individual with the higher score a better credit risk.

For those who have struggled with credit, the good news is the score is not set in stone.

The Extension Service recommends several options to help maintain or improve a credit score. Suggestions include:

* Paying bills on time.

* Keeping balances owed on credit cards and other credit lines as low as possible.

* Paying off credit card balances each month.

* Paying off debt rather than moving it around to other agencies.

* Not opening a number of new credit card accounts just to increase available credit.

* Not closing credit card accounts as a short-term solution to increasing a credit score.

* Being aware that simply closing an account does not make it go away, especially if it has a bad credit history.

RENEE RICHARDSON can be reached at renee.richardson@brainerddispatch.com or 855-5852.