While everyone hears about the importance of a credit report, not all consumers will place a priority on regularly checking their own credit histories. By disregarding the information contained in a credit report until the time comes when you actually need a loan or what to apply for a line of credit, you may be facing rejection in your immediate future.
Why Bother Checking?
There several reasons consumers should be checking their credit report on at least a yearly basis. Even if you have a home, aren’t applying for credit cards, or do not feel your credit information has been jeopardized by something you have done, there is never a guarantee that all is well in the land of credit.
Accuracy – While you may feel your credit is pristine, understand that the credit reporting bureaus make mistakes. Should erroneous information be placed on your credit history report, it can drop your credit score.
Fraud – Someone may be ripping you off right now but you may never know it. Identity thieves and scam artists have become masters and flying under the radar. Someone may have secured a credit card account or other financing tool in your name without your permission or knowledge. If you are not carefully checking your credit information, the cons may get away with it for some time and essentially have the power to ruin your name and good credit reputation. Scan every line of your credit report for accuracy and report suspicious activity immediately to the credit reporting bureau.
Peace of Mind – Even if you have no plans to open a new line of credit, it is good financial practice to know where you stand. You’ll need to now that things are as they should be in order to plan out your financial future. Just because there is no need for a loan now, doesn’t mean an emergency may strike, warranting the need for extra cash. With a bad credit score or inaccurate information, a lender can easily deny you the best interest rates and maybe even the loan itself.
How To Acquire Your Credit Report
This can be a tricky subject because many consumers are misled by companies advertising free credit reports. These agencies certainly do provide a free report but there are strings attached (ie: monthly membership enrollment in a program). All consumers have the right to order one credit report annually from each of the three credit reporting agencies: Experian, Equifax, and TransUnion. Any consumer denied credit also has the right to order a free copy of their report within 60 days of the denial. The only place to get a genuinely free credit report is through the website AnnualCreditReport.com, which is credited by the US Federal Trade Commission as being the only authorized source for the free annual report as dictated by law. All three of the credit bureau reports can be ordered from one location at no charge to the consumer. Please note: if you plan to acquire a copy of your credit score, there will still be a fee for this information.
What To Do With Your Credit Report
Analyze every bit of information listed on the credit report, including your name, address, Social Security number, and all account information. If you are not familiar with the layout of the report or what the information means, the credit bureaus have begun providing a guide sheet to help you understand what you are looking at.
Any information that is inaccurate should be jotted down for later reference. Each credit bureau will have an online or printed form where you can list incorrect information. All consumer requests must be investigated by the credit bureau once they have been received. Investigations can change the status of the report information if found to be false. In some cases, the creditor will not comply with the request for information and subsequently the incorrect data will be dropped from the report.
Consumers who actively review their credit reports can have a positive impact on their credit score. By updating and correcting information, your report will reflect a more accurate picture of your financial health and be an asset for you when applying for new credit, looking for a new job, renting a home, and even getting insurance quotes.
