Your credit is a vital part of your financial fitness. To make sure your finances are in order, you should check your credit report periodically. But that’s not the only reason to look at your credit report. Here are some others.
Why You Should Check Your Credit Report
To make sure the information in it is correct. Some statistics say most credit reports include some type of error. These errors can be relatively harmless like an incorrect address. They can also be extremely harmful, like a collection account that doesn’t belong to you. It’s common for fathers and sons who share names to end up with the other’s accounts on their credit reports.
There’s a dispute process you can go through to remove these credit report errors, but you have to find the errors first. The only way to know whether your credit report has the right information is to check it periodically.
To detect identity theft. Identity theft happens when someone uses your personal information to create new accounts in your name. Unfortunately, many identity theft victims don’t realize the crime has happened to them until bill collectors start calling and sending letters. Or worse, when they’re denied for credit cards and loans because these fraudulent accounts have gone delinquent.
You can detect identity theft sooner by watching your credit report throughout the year. Review your credit report and look for accounts that don’t belong to you or that you won’t remember opening. Use the credit report dispute process to remove these accounts.
So you know what lenders see when they review your report. Whenever you apply for a new loan or credit card, lenders will check your credit report to decide whether to approve your application. They may ask some questions about some of the accounts that appear on your credit report. If you don’t know what’s on your credit report, these questions can be a complete surprise. Before you apply for a new loan, check your credit report so you know what your lender is seeing about you.
To find out what’s influencing your credit score. Your credit score is based solely on the information that appears on your credit report. If you want to know what’s bringing your credit score down, the perfect place to look is your credit report. Most credit reports include a detailed analysis that tells you what information could be hurting your credit score.
Until you check your credit report, you can only speculate about what’s affecting your credit score. Seeing late payments, collection accounts, and other negative account information will confirm the things that are hurting your credit score.
To take inventory of who and how much you owe. The good thing about your credit report it’s an almost comprehensive list of all your debts. If you want to start paying off your credit card and other debt, your credit report is a good place to look to figure out who you owe and how much you owe them. Before you start paying off your debt, check your credit report and create a list of your outstanding debts.
Keep in mind your credit report may not contain all your debts, because some of your creditors and lenders may not report to the credit bureaus. For those debts, you might check your billing statements.
How to Check Your Credit Report for Free
The federal government recently passed a law that allows every consumer to get a free copy of their credit report from each of the three bureaus once a year. That means once every twelve months, you can order your Equifax, Experian, and TransUnion credit reports.
Three Ways to Get Your Annual Credit Report
While there are many sites on the internet that promise to give you a free credit report, there is only one site – AnnualCreditReport.com – that allows you to access your credit report with absolutely no strings attached.
At AnnualCreditReport.com, enter your personal information (name, address, social security number, etc.) and you’ll be taken to a page where you can view your credit report from each of the credit bureaus. When you order your annual credit report online, you can view it instantly.
You can also order your free credit report by mail, by filing out the request form and sending it to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.
Finally, you can request your annual credit report by phone by calling 1-877-322-8228. It can take up to 3 weeks to receive your credit report when you order it by mail or phone.
Those Other Free Credit Report Websites
When you order a free credit report from any other website, you typically must enter your credit card number and agree to sign up for a free trial subscription to a credit monitoring service. If you fail to cancel the subscription before the trial ends, your credit card will end up getting charged each month until you finally cancel. If you decide to take advantage of one of these free credit report offers, make sure you cancel before the trial ends to avoid having your credit card charged.
If you want to watch your credit reports throughout the year, order only one of your three annual credit reports every few months.
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