Personal Finance

Why Should You Check Your Credit Report?

By Karl T.

Good credit benefits you in several ways. It can help you quickly be approved for a loan, receive a low interest rate and rent an apartment. If you have a high credit score, you can shop around for loans at somewhere like Moneysupermarket.com, selecting the lender that offers the best interest rate for your needs.

On the other hand, if you have poor credit, you will find it more difficult to be approved for a loan. If you do receive a loan, you will often be saddled with a high interest rate, leading to higher monthly payments. Leasing agents may refuse to rent an apartment to you if your credit is poor as well. Since good credit is crucial to your financial future, it is imperative that you check your credit report on a regular basis. Read on to learn several reasons why you should check your credit reports.

Inaccurate Information on Credit Reports

Credit reports can contain inaccuracies. These inaccuracies can cause your credit score to plummet. Sometimes your credit reports may contain a foreclosure, bankruptcy, court judgment or tax lien. This information may no longer need to be reported if sufficient time has passed.

If this type of information is on the credit reports unnecessarily, it can adversely affect your credit. Checking credit reports also ensures that your name and social security number is accurately reflected. People with names or social security numbers that are extremely similar to yours may have their information accidentally end up on your credit reports.

Accounts may be listed as “not paid as agreed,” when you actually paid the account in full. Other accounts may be listed as ongoing when they have been paid in full. Examining your credit reports and correcting inaccuracies helps to boost that all-important credit score.

Protect Yourself from Identity Theft

Reviewing credit reports on a frequent basis protects you from identity theft. Identify theft occurs when someone uses your name or social security number to apply for loans or credit cards or to buy expensive products using in-store credit. By checking this financial document, you ensure that no fraudulent activity is occurring with your credit. If you find that you are a victim of identity theft, you can immediately take action to correct the inaccuracies.

When you monitor your credit reports, you are able to improve your credit score. The law requires that credit bureaus report accurate information. If you see any inaccuracies, you have the right to dispute them. Smart consumers check their credit report at least once a year to ensure that they build and maintain a healthy credit score.

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