Why stay in the dark about your credit when it is easier than ever to get a credit check? Previously, it was difficult to get a credit report, and people could not monitor their credit as closely as they can today. Credit reports are available to download in minutes the most up-to-date information that’s available. There is no longer a reason for people to avoid checking their credit on a regular basis. Checking your credit can allow you to monitor the report for any changes, prepare for a loan application, stop fraud and identity theft, check for new collections accounts, set financial goals, and spot errors. Read on to learn more about the many reasons that you should make it a habit to check your credit report.
Monitoring Your Credit Regularly
Staying on top of your credit report is important because it allows you to see any changes when they hit your report. Even if you know there is going to be a change in your credit report (for example, you’ve recently paid off a credit card) monitoring your credit report allows you to see exactly when these changes show up on your credit report. This can be hard to predict, as the creditor may take a while to report the activity and the credit bureau may take a while to change the credit report.
Getting a Credit Check Before a Loan
If you’re planning to apply for a loan, checking your credit score is crucial in order to know what the lender is going to see. This also holds true if you’re planning to apply for an apartment or for a job that requires a credit check. If you’re planning to apply for a loan but your credit check shows that your credit needs work, you can figure out what you need to do in order to have a better chance of getting the loan at a low-interest rate before actually applying.
For all you know before checking your credit, it may be perfect. If that’s the case, use this knowledge to your advantage while negotiating.
Stopping Fraud and Identity Theft
One of the most often overlooked reasons and most important to check your credit is to ensure there is no fraudulent activity. Many people who have been the victims of identity theft have no idea what’s going on until a great deal of damage has been done to their finances. By habitually checking your credit, you will see right away if an account has been opened in your name that you do not recognize. A credit report also allows you to check for more subtle signs of identity theft, like a new address or an employer that you never actually worked for. Of course, these could be simple errors which you can have removed.
Checking for New Collections Accounts
Usually people are well aware that an account is being sent to collections. It is, however, not entirely out of the realm of possibility for them to be unaware that an account has been sent to collections. The notification could have been sent to a previous address or lost in the mail. A collections account can seriously hurt your credit score. so it is important to pay them off as quickly as possible. It is also possible that a collection account was put on your credit report in error. Occasionally, this happens to people with a similar name to someone who actually has a collections account, and should be resolved through the credit bureaus directly.
Setting Financial Goals
Checking your credit score can help you set financial goals. Of course, many people set a target number for their credit score. Your credit report also shows your total amount of debt, which can be useful information if you are trying to get your debt down to a certain number. Checking your credit report will also let you know when a closed account is removed from your credit history.
It is common for credit reports to have errors. Most of the time, these errors are simply typos. However, it is possible that your credit report could have erroneous information that is negatively affecting your credit score. If you check your credit report, you can spot these errors and report them to the credit bureau.