Free Credit Reports VS Paid Credit Reports

The majority of people in South Africa are not entirely aware of what their credit reports mean for them in the short term as well as long term. The prevailing impression that people have about their credit reports is that it somehow influences the kind of offers they get from lending institutions, credit card providers and insurance companies.

While this impression is accurate, it does not really capture the concept in detail. Your credit report is an analysis of your finances designed to allow third parties to know how reliable you are and what kind of a risk profile you have so that they can decide on what kind of products to offer to you.

Once an individual understands the true import of his credit report, the reaction is to decide to review his credit report on a regular basis. If you have also decided this then it is likely that you are currently confused between getting free credit reports and paid credit reports.

In order to make a wise decision on this subject, you need to know the differences between free credit reports and paid credit reports. There are only two major differences between these two kinds of credit reports.

The first difference, as their names suggest, is whether they are available free of cost or after a certain amount of payment. Needless to say, from this perspective, free credit reports easily win over paid credit reports.

However, there is another consideration that you will have to make when deciding between free credit reports and paid credit reports. This is a major distinction that may have an impact on how you plan to use your credit report. This is the fact that free credit reports will not carry your credit score while paid credit reports would.

This, as mentioned earlier, is a very crucial difference. The reason for this is that your use of the credit report would vary on the basis of whether it has your credit score or not. If your purpose is to just go through the credit report and pinpoint any mistakes or errors then you do not really need your credit score to be on it.

However, if the objective behind getting your credit report is for you to analyse chances of you getting a loan, a credit card or an insurance policy then you will need a paid credit report as it would contain your credit score.