Get a Credit Card by Checking Your Credit Report

What is a credit report?

Three main companies track everyone's credit activity in the country. They are Experian, TransUnion, and Equifax. When you apply for credit, the creditor contacts one of these companies and asks for your credit report. This gives them all of the information required to decide whether to issue you a credit card or another form of credit.

Unfortunately, these credit reporting organizations are notoriously unreliable when it comes to the facts. Finding huge, obvious errors on your report is not at all uncommon. Some include accounts you never held, addresses that never existed, and the like. Furthermore, some positive transactions may not have been reported to the bureaus, meaning that they don't show up on your credit report.

What to do

Act before you run into problems. Before applying for a credit card, order your credit report from all three reporting agencies. Yes, all three: since you can't control which one creditors contact, and they may very well all contain different information. For example, one may have an error that doesn't show up on another.

When you find errors, immediately report them not only to the credit bureau but to the creditor in question. Often all it takes to clear up the mistake is your creditor calling up the bureau and pointing out the error. If your creditors are less cooperative, the agency law requires an investigation into your complaint -- but one warning, the onus of proof lies with you. That's why keeping records is important.

Whether you're applying for a credit card or taking out a mortgage, knowing your credit score keeps you on the right track.