You need to check your credit report often. If you think you only need to think about your credit report when seeking a loan, think again.
Your credit report is a valuable tool in identifying reporting errors and is even an early warning for identity theft. Being proactive in monitoring your credit score can help you resolve previous credit problems faster and help you avoid future credit problems altogether.
When and How to Check Your Credit Report
It’s recommended that you check your credit score at least once a year. There are three major consumer reporting companies that can provide your credit score: Equifax, Experian or TransUnion.
You can contact any of them to sign up for a detailed credit score subscription. However, you’ll have to pay for such services, whereas the U.S. government provides free access to your credit report through each of the three consumer reporting companies once each year via AnnualCreditReport.com.
To make the most of this free service, you can check your Equifax credit report early in the year, your Experian credit report in the middle of the year and your TransUnion report later in the year, for example.90% of top lenders use FICO® Scores. What’s your FICO® Score? Find out now for $1 with enrollment in Experian Credit TrackerSM!
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Why You Should Regularly Check Your Credit Report
You need to look for errors in your reports.
Your credit report affects how much money your bank is willing to loan you (if any at all) and on what terms. If there is a reporting error from any of the three reporting companies, it’s important to take care of it immediately, before you try to apply for a loan. Aside from banks, potential employers also could request a copy of your credit report.
By regularly checking your report, you can spot discrepancies as soon as they arise and avoid a major headache when applying for a loan or a job. Check to make sure your name and basic information is up to date and spelled correctly and that all of the credit cards or loans that are listed are actually yours.
Your credit report can alert you to identity theft.
When looking for errors in your report, you might see that someone else’s social security number is listed, or that it includes loans that you never applied for. These mistakes could have been made by the consumer reporting company or by your creditors, or they could point to a much larger problem: identity theft.
Take quick action by reporting the problem to your bank and to all three of the consumer reporting companies. If you are a victim of identity fraud, someone else’s debts will be reported under your name, and it can send your credit score plummeting.
You can identify areas of improvement in your credit.
Understanding why your credit score is low can help you make improvements in how you handle your personal finances. A past history of poor credit performance does not have to spell disaster for all of your future loan applications.
It can take some time, but you can bring your credit score back up by establishing a new routine of fiscal responsibility. Your credit report clearly shows your weaknesses and serves as a benchmark to demonstrate your progress (or lack thereof) in maintaining good credit.
Keeping an eye on your credit report is easy and free. It takes just a few minutes to view your score online, and by taking the time to regularly check your credit report, you can nip any problems in the bud. Good credit is a well-earned accomplishment; don’t let a long-standing reporting error or a case of identity fraud take that away.
About Daisha Gregory
Daisha Gregory is a freelance writer and an editor for various business and finance magazines. His now working full-time in SenecaOne, one of the largest financial services companies today. In his spare time, he enjoys volunteering with causes close to his heart—helping elders and the homeless.
Always a good idea to make use of free resources to check the data. It only takes a few minutes and it’s worth knowing where you stand (and whether the information is correct).
I’m intrigued by rotating through the three agencies at different times of the year. In the past, I’ve pulled them close to the same time to check for discrepancies among them.
Certainly a good idea to keep an eye on your credit report.
Personally, I wish I lived in an era where credit reports weren’t required. The thought of random corporations sharing all my purchase data and financial information amongst themselves, and with whoever pays them enough to access it, is sickening. But then again, that’s the world we’ve built for ourselves, one decision at a time.