I'm almost out of school and looking ahead into the future. Right now I don't have a car or mortgage loan, but I plan to have both in the next few years. Building good credit takes time, so it's best to start working on improving my credit now so I can be in a good financial position when it comes time to take out one of those big loans.
My first step was to get a free copy of my credit report through one of the three major bureaus. TransUnion, Equifax, and Experian are all required to provide each individual a free copy of their report once per year. However, everyone should know that there is a difference between a credit report and a credit score. What these major bureaus will provide is a report: a log of all accounts to date and record of payments and defaults. It does not include the three-digit score that lenders will use to evaluate your credit-worthiness later on.
Before planning on making any major purchase, it's a good idea to check out your report. Do it at least 6 months in advance of the purchase so that if there are any dings to your credit you will have time to repair them before the lender will see your score. Steps to rebuild your credit include making on-time payments, reducing your overall amount of debt, and refraining from requesting any more lines of credit. Establish long-term relationships and don't close old accounts, even if you no longer use the card.
Aside from being prepared for a major purchase, getting a yearly report is important to stay on top of your financial future. Getting annual reports will let you know if you are a victim of identity theft, which is a quickly growing crime.