Checking your credit report is an important part of financial management and should be conducted on a regular basis. If you have never checked your credit report, you have no idea what your creditors have been reporting about you and consequently you have no idea what the report has done to your credit score. Everyone should take advantage of the free credit reports they are entitled to each year by federal law to check their credit reports from each of the three major credit-reporting bureaus. Here are some good reasons for you to check your credit report.
You May Have Been An Identity Theft Victim
It is a good idea to pull your credit report if you think that your credit card and/or other personal information may have been compromised. If someone has fraudulently used your data to open new accounts, those accounts will be reflected on your credit report. If you discover you have been a victim of identity theft, you should monitor your credit reports while the situation is being remedied so you can report any damaging and fraudulent information as it appears.
There May Be Errors On Your Report
Studies have found that many credit reports contain errors and that 25% of these mistakes are bad enough to cause someone to be rejected for a loan. There are many different reasons for these errors, including human error during input, transposed numbers, someone else’s information mixed with yours, and duplicate information. Many of these errors can be fixed easily if caught quickly, but the more time that passes, the harder it will be to get the information corrected.
You Need A Loan
You should always review your credit report before applying for a loan so you will know what the lender is seeing about you. This will reduce the risk of receiving unwelcome surprises when you can least afford them. It is a good idea to pull all three versions of your credit report, with the scores included, immediately prior to shopping for a new loan or line of credit. If your credit history has blemishes or your credit score is lower than you would like, try to remedy the situation before putting in your application so that you will qualify for the lowest interest rates possible.
You Have Co-Signed For Credit
If you have co-signed for credit with another party, it is a good idea to check your credit report regularly because the information about the co-signed account is reflected on both parties’ credit reports. If the co-signer is not doing what they have agreed to do, it could hurt your credit score as well as theirs. Co-signers are responsible for upholding the terms and conditions associated with the contract, even if they are not actively reaping its benefits, so it is important to spot any problems before they become big issues that destroy your credit.