Many people know that it is important to obtain their credit report several times each year to review the information, but many of them do not know what they should be looking for. Each credit report should be reviewed for signs that your identity has been compromised, that financial fraud is occurring, or that your credit score is decreasing. As a consumer, you are entitled to one free credit report from each of the three major credit monitoring bureaus annually, making it easy to obtain your credit report and look it over. When reviewing your credit report, here are some things that you should look for.
Collection Activities
In most cases, you know whether you have had a delinquent account sent to collections due to non-payment or defaulting on the terms of an agreement with money owed to a company. If you see collection activity and you have no idea why it is occurring, it could be an indication that your identity has been compromised. Identity thieves often open accounts using the personal information of their victims and run up the balances before abandoning the account and allowing it to go to collections. If you notice this type of activity on your credit score, dispute the information and contact your local authorities to document the fraud for potential investigation.
Late Payments
Late payments can be very damaging to your credit score, with your repayment history making up 35% of your credit score calculation. If you see late payments reported on your credit report, it is a safe bet that your credit score has decreased substantially. If the information is correct, it will remain on your credit report for up to seven years. If the information is incorrect and you have made all of your payments on time, you will need to contact the credit monitoring agency and open an inquiry about the late payments reported. If the bureau finds that the information has been reported in error, they will remove it from your credit report.
Judgments And Liens
If someone has been using your identity fraudulently, it may show up on your credit report in the form of judgments or liens against you. This can also happen if a debt collector reported someone else’s debt mistakenly using your information or has taken legal action against you without providing you with the proper notification. In either case, you will need to take action to protect your credit profile. If you find an item that isn’t yours, you can dispute it and have it removed from your report.