Why It’s Important To Check Your Credit Report Regularly

Check Your Credit Report Frequently

In this article, I’m going to explain why it’s extremely important to check your credit report regularly. If you only check your report every few years, many problems may arise either through identity theft, card fraud, or simple bookkeeping errors on the part of your creditors. While this may not affect your in your everyday life, it is certain to cause a problem when you apply for your next car loan, credit card, or mortgage.

What’s In a Credit Report?

Your credit report contains all relevant information about the credit that companies have extended to you, plus much more. Here are some of the key features in your credit report:

• Credit card account balances and payment history (if you’ve ever been 30 days late or more, this will show up as a big red flag to vendors)
• Mortgage accounts and payment history
• Any outstanding debts from vendors who have extended you any type of loan (car loans, bank loans, etc.)
• Any unpaid taxes that you may still owe
• Any former bankruptcy or foreclosures
• Any balances from lawsuits that you may have lost
• Current and former employment information
• Current and former addresses

As you can see, the list is quite extensive, so knowing what is on your report is crucial. Any incorrect information can result in a lower credit score and possible rejection of credit accounts.

Your current creditors are allowed to periodically check your credit report to make sure that their investment in you is still sound. If you are falling behind in your mortgage, it’s very possible that your credit card companies will either close your account or demand that you pay a higher interest rate.

For any new company to access your credit report, you generally need to give them permission. This permission is implied whenever you are requesting a loan, applying to rent an apartment or house, or asking for a credit card or credit increase. Your credit report can also be checked when you turn on utilities such as gas, water, electric, phone, or cable service.

If an accounting error causes invalid information to appear on your account, then you need to contact one of the credit reporting agencies to request a correction. Sometimes the company who placed the invalid information is able to correct it for you, but that’s not always the case. It’s best to request the correction in both places.

Alternatively, if someone has stolen your identity, they may have fraudulently opened a number of accounts in your name and withdrawn money. When this happens, you need to contact each company that has an account open for you as well as contact each of the credit bureaus immediately. This can be extremely costly if not caught early.

So, check your credit report frequently. You’re allowed one free report per year from annualcreditreport.com, but this will not include your credit scores. If you also would like to know your credit scores and get a report from all three major credit agencies, you can save money by using our Equifax coupon code.