3 Ways Checking Your Credit Report Could Benefit You

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It pays to read your credit report from time to time.

Key points

  • It is important to check your credit report several times a year.
  • It could save you from financial loss and help you make smart decisions about your credit card accounts.
  • Free weekly credit reports are available for the remainder of 2022.

What’s your favorite activity on a quiet evening? Chances are it’s a popular TV series or a good book. Reviewing your credit report, on the other hand, is probably do not on your list.

But it’s a good idea to check your credit report every few months. This could result in the following three benefits.

1. You might get an early warning for fraud

Even if you are a savvy consumer, all it takes is for a company to experience a data breach for you to become a victim of financial fraud. But if you check your credit report regularly, you may find fraud before it affects your credit.

Imagine someone opens a credit card account in your name. In this scenario, a criminal might make a few very small charges to see if they can get away with it before moving on to bigger charges, like a laptop or a TV.

If you check your credit report and notice a credit card account that you know you haven’t opened, it will likely prompt you to investigate. In this situation, you might discover a fraudulent account when it has $15 in charges stacked against it, as opposed to $1,500.

2. You might be motivated to pay off credit card debt

When you check your credit card balances individually, they may not seem that high. But when you add them all up, that number can be more of a red flag.

When you review your credit report, you will see how much of your available revolving credit you are using at one time (this is called your credit utilization rate). And if that number is high, it might prompt you to come up with a debt repayment plan sooner rather than later. This, in turn, could help you accrue less interest on your debt. Also, the less you maintain a total credit card balance, the less damage you will do to your credit score.

3. You could keep an old credit card instead of closing it

If you have a credit card that you rarely use, you might be tempted to close that account. But if you access your credit report and realize that the card in question is your oldest account, it might prompt you to rethink those plans.

The length of your credit history plays an important role in determining your credit score. Keeping old accounts open can work to your advantage.

Don’t neglect your credit report

You are entitled to a free copy of your credit report once a year from each of the three major reporting bureaus: Experian, TransUnion and Equifax. However, since the pandemic, weekly credit reports are free, and that should last for at least the rest of 2022. Checking weekly is probably overkill, but it pays to take advantage of this option and review your credit report every about a few months. Taking this step could save you a world of aggravation for financial fraud, and it could also inspire you to improve your financial situation by paying off debts and keeping long-standing accounts open.

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