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Why is it Important to Check Your Credit Report?

Today, our credit reports are used to make many decisions about our financial future. This includes auto insurance rates, employment opportunities, ability to rent a home or apartment and, of course, whether we can obtain a home, car or credit card loan.  It is critical to protect this very important asset by checking it, at least, annually. Below are some other reasons to check your report and some common things to look for when reviewing it.

  • Make sure that only accurate information is on the report. It is very common for credit reports to contain errors. You don’t want an error to prevent you from getting the best rate on a car loan, home loan, or credit card do you?
  • So you know what the lenders will see. If you are applying for a loan or credit card, you should know what is in your report before the lender requests it. This helps you prepare to answer questions about information contained in your report.
  • To protect yourself from identity theft or fraud. When you check your credit report look for:
    • Credit or collection accounts you do not recognize
    • Inquiries to see your credit report from creditors that you did not authorize.  Sometimes creditors will look at your credit in order to offer you credit. If you see this type of inquiry on your credit report, be sure to check the account section of the credit report to see if an account was opened.
    • Addresses or names (in the personal information section) that you do not recognize
  • To ensure that your accounts have been properly recorded on your report. If you always pay on time you should not see late payments on your report.

If you need help with understanding, disputing or managing your credit and credit reports, contact a certified credit counseling agency, such as American Financial Solutions. In addition, you can get your free credit report by contacting online or by phone at 1 (877) 322-8228. Annual Credit is the only legitimately free place to receive a copy of all three of your credit reports.

Published Nov 11, 2010.