• Every time you engage in a financial transaction you are being tracked.  It gets particularly bad where a commitment is involved (e.g. mortgage, credit cards, or other bills for rent, electricity, phone, etc.).  This massive amount of data enters databases maintained by three credit reporting bureaus that use data provided by all kinds of agencies (banks, credit card companies, utilities, employers, and even your landlord) to monitor how good you are at paying your bills on time.  (Related: Online shopping safety)
• This data is used to decide whether a financial institution is going to do business with you, and if so, under what terms and conditions.  So if your credit history is not so good, an institution may refuse to give you a loan or will give it you at much higher rates.  Landlords may refuse to rent apartments to you and credit card companies may decline your application.  Even employers in many cases run a credit history check on you and if they have doubts they will simply not extend a job offer to you.
• There are several advantages of reading your credit report regularly:
  • You will know what everyone knows about you.  So next time you apply for a loan or rent an apartment or apply for a job, you know what to expect.  And if you have that knowledge, you can do something about your situation.  For example, you can repair your credit history if you do not have a good record.
  • The credit bureaus and organizations that feed them with data are not perfect.  They make mistakes all the time.  If you see something that is not right, you can then take the necessary stops to eliminate wrong information.  (Related:  Personal finance for empty nesters)
  • Identity theft is a major problem these days.  In other words, another person can assume your identity, get loans and cards in your name, and of course, pay none of it back.  Who gets hurt?  You.  If you have access to your credit report, you can catch very quickly if you are a victim of identity theft.  (Related:  How to prevent identity theft)

How to receive your credit reports?

• myFico is now offering all your credit reports and FICO score through one service.  That way you can know what lenders know about you on a regular basis.  Online delivery of reports allows you to take a look whenever an update is available.  (Related:  How to avoid foreclosure)
• IdentityGuard, TrueCredit, TheBeeHive, e-wizdom, and many other organizations allow you to subscribe to your credit reports for a small fee, which is well worth it.  
• Do not be misled if someone is offering you a totally free credit report forever.  Doesn't sound right.  Stay away from such offers.

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