Some people do not ever bother to check their credit report until it is too late. Consumers who want to receive credit at any point in their lives should begin checking their credit well before they apply for lines of credit. The only way that consumers can know where they stand on the credit ladder is to check their credit often—not just when they want to make a purchase using their credit. So many people make the mistake of neglecting their credit. There are more reasons than one that consumers should check their credit often.
Reasons to Check Your Credit Report Yearly
- Consumers should check their credit to ensure that information is reported accurately. It is very common that information is not reported correctly on credit reports. Lenders send information regarding your credit to the credit agencies and the agencies record the information on your account. Many workers work for these credit agencies. It is possible that they may forget to add something to your credit, or they may add something that is inaccurate. You never know when a worker may come in and have a bad day, and they can end up screwing up your credit because of their personal issues prevent them from doing their job correctly.
- Check your credit to ensure that someone else’s information is not on your credit report. Credit agency workers can easily add someone else’s information to your credit by accident. After hours of updating credit report information, it may be possible to make a few errors. You wouldn’t even know that they made a mistake unless you check your credit. In addition, many people out there may have the same last name as you. There may be thousands of John Smith’s or Cindy Johnson’s in the world. Always make sure that their negative credit history does not end up on your credit reports.
- Check your credit frequently to ensure that lenders are reporting your credit history. Lenders are supposed to report your information to credit agencies each month. When lenders do not do report information, it can hurt your credit if you are in the process of building or rebuilding your credit.
- Check your credit to ensure that someone has not opened credit in your name. Fraud is a serious reality in today’s economy. There are people who can fraudulently acquire your personal information and use it to open credit in your name. They could be destroying your credit and you don’t even know it is happening.
Things to Pay Attention To When Reviewing Your Credit Report
- Consumers should pay close attention to inquiries. Inquiries show up on credit reports when lenders run someone’s credit. The information obtained helps them to determine if they will extend credit to consumers. The information is recorded on the credit reports, and it contains the information about the company that pulls the credit and the date of the inquiry. Inquiries can lower the credit score, and it can also be a sign that someone has tried to open credit in someone else’s name.
- Consumers should check the personal information section carefully. This section contains personal information about the credit holders such as past and present address, employers, and names. If any of this information is not correct, it may be an indicator that someone else may have used consumers’ personal information.
- Consumers should make sure that there are no missed payments on their credit. It is very easy for credit agencies to make mistakes on credit reports. Missed payment notices on credit reports that are incorrect may cause consumers to be denied credit. If investors try to get a car loan or a mortgage in their name, they may be denied credit due to mistakes made by credit agencies.
- Consumers should look for closed accounts with inaccurate information. Sometimes consumers close accounts after they have paid them off, and the information is not reported accurately. For example, the final payment that proves that an account is paid in full may not show up on the credit reports. This problem can cause serious issues when consumers try to apply for credit. It may send the message to potential lenders that consumers are not responsible with their accounts. Consumers should contact the credit agencies immediately in the event this situation happens.
When consumers check their credit reports annually they prevent their credit reports from containing inaccuracies. A variety of situation can arise that prevent credit reports from containing accurate information. One simple mistake on credit reports can make the difference between receiving a line of credit and being denied. Consumers cannot afford this kind of mistake on their credit reports.