You know you should check your credit, but do you know how?

In this installment of Industry Focus: Financials, Motley Fool analyst Gaby Lapera talks with Dan Caplinger, The Fool's director of investment planning, about the basics of getting credit information. From basic reports to proprietary scores, Gaby and Dan guide you through where you can get the information you need to make smart credit decisions.

A full transcript follows the video.

This podcast was recorded on Jan. 30, 2017.

Gaby Lapera: Now, you might be asking yourself: How do I get this information? Do I have to pay for it? The answer is no. It's free. There's a couple of different ways to go about getting your credit history, which is also a very vital thing -- you should check it periodically to make sure there's no one expected loans or charges that are under your name that shouldn't be there. But, the other thing is to check your credit score. Dan, I think you do the free report every year with the three bureaus, right?

Dan Caplinger: I do. You can go to annualcreditreport.com. It is a government-sponsored site, and it let's you pick, you get your credit report from each of the three reporting bureaus once every year. You can get all three reports at the same time, you can get one now and wait a few months and get the second then wait a few months and get the third, however you want to do it. It will not give you credit scores, it only gives you the credit report. But that will tell you all the sources of credit that you have. It will, like you said, flag up if you see something that you didn't borrow, it will tell you that. It's federally mandated that you have access to that website on an annual basis.

Lapera: Yeah. And then there's some other credit reporting sites that, you have to put in your credit card number, and they offered to send you your credit report every month. But since you're entitled to that one free credit report, if you put in your credit card number and cancel it after you get your free credit report -- they're federally mandated to give you at least one free one -- you can also do that. I am going to sound like a corporate shill here for a second, but I promise I'm not getting paid, creditkarma.com. They show you your credit score for TransUnion and Equifax, and you can check it whenever you want. They also give you your credit reports. That's free. You can check it multiple times a month, however many times you want. The way that they make money is through ads. They're like, "We see you have this credit score, have you thought about this credit card, or this type of loan for yourself?" But it's great, because you can monitor your credit score pretty constantly. That's really important for me, because all of my data has been stolen multiple times through the OPM hack. If you're from DC, I'm sure you've heard of it. Even my fingerprints are gone. Someone in China probably has them. I don't know what they're doing with them. It's pretty sad that they have them. (laughs) But, that's why I monitor my credit reports so hawkishly, because I know that it's out there. Most people's are, but I definitely know that mine is. (laughs) So, yeah, do you have anything else you want to say, Dan?

Caplinger: It's easy to think that credit is something you take advantage of when you need it, and you're not really thinking about it most of the time. But in order to have that credit available to you when you need it, it actually makes sense to think about these things beforehand, and to think, "If I'm thinking about buying a house a year or two from now, what's my credit score now?" And once I know that, how can I get it higher, so that when the time comes and I actually need the loan, I'm going to be in the best position to get it? Doing that homework can put you in a better position than trying to scramble at the last minute right when you need to get that loan, and you need it right now.

Lapera: Definitely. And also, please be careful about getting into debt. Dan, I really love the way that you summarize our episodes at the end. There's a little perfect send-off every time. 

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