Many of us think of our credit reports as tools lenders use to decide whether to give us a loan or a credit card. However your credit reports can also come into play when you’re trying to get an apartment or insurance and sometimes even a job. With that in mind, perhaps you can see why it’s important for you to know what’s in your credit report before submitting applications for those things. However that’s just one of the reasons checking your credit report matters.
What is a Credit Report?
Let’s, for just a moment, say you’re trying to do a car title loan buyout by getting a loan from a bank or a credit union to pay off the title loan. The lender will ask permission to check your credit before making a lending decision. With your okay, they’ll request one or more of your credit reports, which are made up of information provided by credit card companies, mortgage lenders, car loan providers and other types of lenders to the big three credit bureaus (Experian, Equifax and TransUnion). The better your credit reports look, the more likely you are to get that loan at a good interest rate.
Why You Should Check Your Reports
Because your credit reports contain information people have reported to credit bureaus there could be mistakes. This means your credit reports could show information that isn’t yours. A person whose name and Social Security number (SSN) are close to yours—who doesn’t care about their credit—could be mistaken for you. This can lead to negative items appearing on your credit reports erroneously.
Or, consider a situation in which a bunch of your loan payments are somehow credited to the wrong account. This will result in you looking like you’re behind on those payments on your credit reports. That’s going to drag your credit score down, which could cause you to be refused credit, insurance, an apartment, or even a job you should have been able to get. Reviewing your credit reports on a regular basis will help you spot such mistakes before they cause too much damage.
Then, of course, there is the criminal element to watch out for. Some crook could get your credit card numbers, name, address and SSN. They could then to proceed to weak havoc on your good name. Reviewing your credit reports on a regular basis can help you spot issues like these before they get too far out of hand.
Where to Find Your Credit Report
You can get a free copy of each of your credit reports every year. The law mandates this, in order to help you keep track of what’s on your credit reports. The Federal government has authorized a website—AnnualCreditReport.com—to provide you with copies of your reports from each of the three reporting bureaus every year.
Quick Tip: While there can be minor differences between the reports provided by each of the bureaus, the data is largely the same across the board. Ordering one from a different company every four months helps you check your reports more frequently.
The Annual Credit Report site is the only place you can get your reports with no strings attached. Other sites advertising the availability of your credit reports for “free” usually have ulterior motives. They will ask you to subscribe or register—at which point they will sell your contact information to third parties for profit. This is how they provide you with your credit reports for “free”. In exchange for that “free” credit report, you’ll agree to become a product they can sell.
In Summary
Ultimately, the reason checking your credit report matters is to maintain control of your financial life. Data can be placed in your report erroneously, payments can get mixed up and people will try to steal your identity. Reviewing your reports on a regular basis will help you correct those types of issues before they do too much harm. By the way, if you should happen to find data that isn’t correct on your reports, you’ll find what you need to dispute it at the USA.gov website.
