One of the first things to understand about your credit report is that it is not the same as your credit score. These are two different things altogether. Your credit score is determined by the information on your credit report, which is why it is so important that consumers keep track of the information that is on their report and correct any mistakes as quickly as possible.

The second thing to understand about your credit report is that it is not a single report. In fact, it is three reports. These are kept by the three big reporting agencies: TRW, Trans Union, and Equifax. Each of these agencies maintains about 170 million credit files on individuals based on 2 billion items of information.

You are allowed by law to request one copy of your report from each agency each year. You can do this online or by mail. It is a good idea to check your reports annually. Of prime importance when checking your reports is your personal information. This is collected only for identification purposes and includes name, current and previous addresses, Social Security number, year of birth, employer, and the initial of your spouse's first name if you are married. Any information regarding race, gender, religion, salary, medical history, personal assets, personal background information or lifestyle, and criminal record is not to be collected.

The major credit bureaus gather information supplied by your creditors. This information includes how much credit you have available, whether you have had any 30- or 60-day late payments, and whether any accounts have been referred to a collection agency. There can be more. Your credit report may also include any information that is part of the official legal public record, including bankruptcies, foreclosures, liens and any types of legal judgments that were assessed against you. Bankruptcies remain on your credit report for ten years. Other negative information is eliminated after seven years.

All of this information is then used to calculate a credit score. The higher your credit score is the better chances you have of getting credit from a lender and at the best interest rates. Conversely, if your score is low, you may find if difficult to get credit and if you do get credit you may have to pay higher interest on the loan.

In the event that you are denied credit based on your credit report, you are entitled to receive a copy of that report, free of charge. You must request the report and you must do so within a certain amount of time. Federal law requires the credit bureau that prepared the report to send you a free copy if you request it within 30 days after your credit application was rejected. The three big agencies will often allow up to 60 days.

While you are allowed one free copy per year, you can order as many as you like during the year, but you may have to pay a fee for them. The three major nationwide credit bureaus are TRW (1-800-682-7654), Equifax (1-800-685-1111) and Trans Union (1-800-888-4213).