Consumer Comeback Blog

8 Important Reasons to Check Your Credit Report Regularly

Written by Jeffrey Trull

check-your-credit-reportCelebrating our birthdays, setting resolutions, and changing smoke detector batteries are all things we do regularly. But what about looking over your credit report?

You might check your credit report here and there and maybe only when you need to examine your credit history more closely before applying for a loan. But that might not be enough, and you could be suffering when waiting long periods between checking your credit report.

Before waiting any longer, consider these reasons to check your credit report right now.

1. It’s free

The best news about accessing your credit score: it won’t cost you anything. Thanks to the Fair Credit Reporting Act, you can get a free copy of your credit report from each of the three major credit reporting bureaus (Equifax, Experian, and TransUnion) once every 12 months.

You can grab all three at one time or space them out over the course of the year. Just visit AnnualCreditReport.com (and not any other free-sounding credit report sites) to get your free reports.

2. It’s quick

Checking your credit report is quick and easy, thanks to the above website. Within minutes you can access your credit report and scan through it to find any glaring mistakes.

3. Your credit report determines your score

Your credit score is simply that — a number that doesn’t tell you much more on its own. What’s really behind your credit score is what’s contained on your credit report.

Late payments, open and closed credit accounts, and balances are all tracked and recorded on your credit report. You’ll need to examine these facts about your credit past to determine how to improve your score in the future.

The credit agencies even make this part easy for you. They’ll tell you how many negatives, if any, exist on your credit report and show them to you. For everything else, check out what goes into a credit score to see which parts need improvement.

4. You may find errors

The best way to check for errors involving your credit: look at your credit report. There’s no single spot with more complete information, and if you check regularly, you’ll be able to find errors more quickly than with any other source.

Some common errors to look for when you check your credit report include:

  • Incorrect information about delinquent accounts or missed payments
  • Incorrect personal information
  • Missing accounts, accounts that don’t belong to you, or duplicate accounts
  • Negative information more than seven years old
  • Incorrect dates

All of these errors can affect your credit score negatively, so checking your credit report and following up with credit agencies to dispute any errors is crucial to keep your score at its highest.

5. Watch for fraud and identity theft

When your personal information is compromised, thieves can open new credit accounts using your Social Security number and other sensitive information. It’s very possible that you won’t find out about fraud before spotting it on your credit report.

Finding problems on your credit report doesn’t take a lot of time. Just a quick glance down your report every now and then can prevent months of anguish later.

6. You’re looking for a loan

There are almost no times that are more important for your credit score than when you’re applying for a loan, especially a home mortgage. The difference between a good and bad credit score can make a huge difference in the cost of your loan, or if you even get the loan at all.

You should always be thinking about your credit, but the months that lead up to getting a loan are most important for when you need to focus on your credit and check your credit report.

7. Check up on a co-signed loan

While co-signing on loans might be risky, if you do end up doing it, you’ll need a way to stay on top of how your fellow borrower is doing with payments.

Hopefully you’re in regular contact with the person you co-signed for and have open and honest communication. But your credit report will have the definitive answer if something’s actually wrong. Is the loan still in good standing? Or are payments late? Or, worse, is the account in default? As a co-signer, it’s still your credit on the line. Look out for any problems on your credit report and work to fix them as fast as you can.

8. Track credit inquiries

Whenever you authorize someone else to view your credit, that’s called an inquiry. These inquiries impact your credit score, especially when there are many in a short period of time.

Fortunately, these inquiries are tracked on your credit report.  If you discover several have recently been recorded, you may consider holding off on applying for additional lines of credit until some drop off.

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