5 Reasons to Check Your Credit Report on A Regular Basis

According to the Consumer Financial Protection Bureau a credit report is a statement that has information about your credit activity and current credit situation such as loan paying history and the status of your credit accounts. In a nutshell a Credit report lists a history of your finances. How often do you check your credit report? 

Most people have more than one credit report. Credit reporting companies, also known as credit bureaus, collect and store financial data about you that is submitted to them by creditors, such as lenders, credit card companies, and other financial companies. 

How is Your Credit Report Used

Lenders use your credit reports as part of their evaluation process when deciding whether to extend you credit and at what terms.  The information on your credit report is used to calculate your credit scores.

Lenders are not the only ones to use your credit report. Prospective employers, utility companies and landlords may also access your credit reports. The information on your credit report can affect, the home you live in, the job you get, how much money you can borrow and how much interest you’ll pay. But even though you can review these reports for free, most adults have not looked at their credit report in years. 

Benefits of Checking Your Credit Report

Here are five benefit of checking your credit reports on a regular basis;

Identify Inaccurate or Incomplete Information

Checking your credit report often will ensure your personal and credit account information is accurate and complete. If you do see something you believe may be inaccurate or incomplete, contact the company reporting the information. 

If you see information on your credit report that you believe may be the result of fraud, contact the company reporting the information and let them know there may be fraudulent activity. 

Spot and Dispute Errors

When you check your credit reports, you’ll want to make sure your lenders and creditors are accurately and completely reporting your payment history. A payment that was mistakenly reported late by a lender can badly damage your credit especially when you are building credit. Have this corrected by  disputing it with your lender or directly with the credit reporting agency on whose report the late payment appears and have it corrected.

To Make Sure You’re in a Good Position to Borrow Money

If you’re planning to apply for credit, including making a large purchase like a house or a vehicle, preparation is important. Checking your credit report first will help you figure out if it’s the right time to apply, or if it’s better to first clean up your credit history and then move forward with those plans.

RELATED: 5 Reasons Why Your Credit Score Can Decrease

To Help You Stay on Top of Your Finances

Your credit report is a snapshot of your financial health to a large degree. While that report won’t tell you how much money you have in savings or how well you’re doing in your brokerage account, it will tell you how you’re doing at managing your debts.

It’s Free

You can request a free copy of your credit report once a year from each of the three major credit reporting bureaus, Equifax, Experian and TransUnion. It’s a good idea to stay on top of your credit, even if you don’t plan to borrow money. If you find issues with fraudulent accounts or inaccurate information, clearing them up can be time-consuming. So it’s better to start the process now than miss out on a great new apartment or job opportunity down the road.

Check Your Free Credit Report

Obtain free annual credit reports: The main way to check your credit report is annuacreditreport.com , an official website sponsored by the three major credit bureaus to give you access to credit reports from each of these three credit bureaus for free. 

You’ll need to take a few steps to receive your credit report online, in the mail or over the phone; you can visit annuacreditreport.com to learn more. If you choose to receive your credit report online, you can generally view it instantly. If you’d like to request it by mail or phone, you will generally receive your credit report in 15 days.

Use paid services: You can also get copies of your credit report through a variety of paid credit services that also typically offer other options like credit monitoring or identity theft protection – in various packages. Just keep in mind that they generally don’t offer you all three credit reports, so you’ll want to request additional reports to get a full picture of your credit.

RELATED: What Are The Best Ways to Increase Your Credit Score

Final Thoughts

A major step toward feeling empowered financially is knowing where you stand in the eyes of lenders and creditors. Take advantage of your right to free credit reports as often as you can to get an accurate, up-to-date picture of your finances. 

You can get a free credit report from Experian that updates monthly.  Doing so can help you catch errors you can correct or identify signs of fraud. Diligent monitoring can help ensure your report, and score, is accurate and spare you unpleasant surprises when you apply for a credit card, loan, or make any other important financial decision.

If you checkyour credit score isn’t where you’d like it to be, you can begin taking steps to improve it.