Most people should check their credit reports once a year. Most people should see their doctors once a year, too. Just as each person has a different health situation, each person also has a different credit situation. While once a year may be enough for those with good credit, others may need to check their reports more often. In this economy, many people are in sticky credit situations, opening more accounts than usual, or at least just wanting to be aware of their credit information. In fact, there are many reasons to check your credit report more often than once per year.
You may check your credit card and bank statements thoroughly every month, but in these times, that may not be enough to detect identity theft. When a thief opens a brand new account in your name, it won’t show up on your credit card bill, but you will see it on a credit report, since credit reports show new accounts that have been opened.
Identity fraud has become a huge problem as of late and the theft extends beyond stealing your money to stealing your credit by opening accounts in your name and running up the balances. Worst of all, you will be stuck with their massive credit card debt. When the collectors come calling at your door, you know you have been defrauded too late.
If you have made bad credit decisions in the past and you would like to resolve them, or, if you have excellent credit and would like to keep your score up, being aware of the information on your credit report is a good place to start. Checking your credit report allows you to know what creditors have reported about you, and it contains information about accounts you have had or currently have. Knowing this information is vital to improving or keeping your credit score.
Applying for a loan is another situation where you need to know what is on your credit report. You will want to know what reason a creditor may have for denying you a loan. If you are denied for a loan, it could be something as small as a twenty dollar debt from four years ago. If you are rejected for a loan, you are entitled to pull a free credit report, which you should look over to ensure that all information is correct.
Credit reporting bureaus are made up of people, and where there are humans, there is the possibility for human error, even on your credit report. You have the legal right to challenge any errors that you may find on your report. If you do make a challenge, credit agencies are required by law to investigate to make sure the information is correct.
When a lender runs a credit check on you, you have the right to know what to expect. You do not want to be rejected for a loan because your file contains a human error that you were unaware of until your loan was denied and you most certainly do not want to find that your finances have been ravaged by an identity thief while your back was turned.
Remember, you are entitled to one free credit report each year, but that does not mean that you are safe checking your report only once per year. If you are planning a large investment, thinking about taking a major loan, buying a house or maybe just being curious, get your credit report and make sure everything is in order.
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