Here’s why it’s important to stay on top of your credit report.
There are certain tasks in life that need to be accomplished, even if they aren’t the most fun or engaging. For example, we all have to file our taxes, have our cars serviced, and take the time to have an annual medical check-up to monitor our health.
But just as you need to fit these tasks into your schedule, it’s also essential to set aside time to regularly check your credit report, ideally three times a year. Here’s why.
1. To stay on top of your finances
Your credit report is to a large extent a snapshot of your financial health. While this report won’t tell you how much money you have in savings or how well you are doing in your brokerage account, it will tell you how you manage your debt.
Specifically, your credit report will include a list of your open credit card accounts and loans, as well as your various balances. It will also show you how much of your available credit you are using at a time so you can see if you have a reasonable amount of debt or not.
2. Be on alert in the event of fraud
These days, no one is immune to financial fraud. Even if you follow smart practices to protect your personal information – like shredding sensitive documents rather than throwing them away – a criminal can still get a hold of your credit card or social security number and open a tab on it. one of your accounts or open a new one in your name. Checking your credit report regularly could help you find out this information as early as possible and minimize the damage.
Suppose a criminal opens a credit card in your name. If you see this account listed on your credit report and it doesn’t sound familiar to you, you’ll know you need to take action. But without checking your credit report, you might not discover this account until you start receiving default notices in the mail – by then your credit score might already have been affected.
3. To make sure you are in a good position to borrow money
You may be preparing to apply for a mortgage or other large loan for an important purpose. Checking your credit report first will help you determine if this is a good time to apply, or if it is better to clean up your credit history first and then move forward with these. plans.
Suppose your credit report shows that you have two delinquent accounts. This might cause you to delay your borrowing plans and deal with credit issues first so that they don’t prevent you from getting approved or getting a competitive interest rate.
How to check your credit report
Right now you are entitled to one free copy of your credit report every week until April 2022. But normally you can get one free copy per year from every major information bureau – Experian, Equifax and TransUnion. You can go to each office’s website and request a free copy of your report, or visit annualcreditreport.com for a copy of all three reports. It doesn’t matter how you access your credit report, as long as you make sure you do it regularly.
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