Why should you check your free credit report? Because it’s free to check your credit report. Know that your financial health is just as important as your physical and mental health. Your score may have updated without you even realizing!
Why Your Credit Report Matters
Understanding why your credit report matters requires that you check your credit report on a monthly or yearly basis. You can perform a check from each of the three credit bureaus. In fact checking your credit report is entirely free Under the Fair and Accurate Credit Transactions Act of 2003. Gaining a fresh copy of your current credit report will alert you of errors in your report that are not your fault. Plus checking your credit report will also make you aware of any acts of identity theft, credit card fraud or other wrongdoings that would otherwise go unnoticed. [Check your credit score for free. ]
How to Check Your Score For Free
Another name for credit report is credit score or credit file. A score is a numerical grade assigned to you. The score is indicative of your financial wellbeing and long term money management. Sometimes though there are mistakes on credit reports that are detrimental and not your fault. According to a study by the Federal Trade Commission, one in four people find errors in their report that negatively affect their credit score.
Mixed File Credit Report Errors
Most of these credit report errors are known as a mixed file. This means your credit report contains information from someone else’s credit file. This could be a genuine data processing mistake or worse a consequence of financial fraud. Discovering these issues sooner rather than later helps you to file a written dispute to the credit reporting bureau. Then work can swiftly be actioned to correct the mistake and set the record straight. Not only that as explained previously good credit can reduce the cost of maintaining your physical and mental health also.
Did You Ever Cosign On a Credit Card?
Although the format and layout of each credit report will vary from company to company. All credit reports contain basically the same categories and topics of information. You may have cosigned in the past on behalf of your children or acted as a guarantor for a financial product such as a credit card or a loan. What if some of this information held by the credit agencies is actually incorrect? Checking accuracy is a key reason why your credit report matters so much.
Identifying Your Personal Information
The identifying personal information category on a credit report includes data such as basic information about you as an individual. This would typically include your name, your social security number, your date of birth, and your background employer information. Plus it would normally include home addresses and any previous addresses. This information is provided as a way to identify you. It is not used in credit scoring and is updated by the information you supply to lenders and insurance companies when applying for loans and insurance cover. The integrity of your personal information is another valuable reason why your credit report matters.
Understanding Trade Lines On Your Credit Report
Trade lines on your credit report are just a listing of all your various credit accounts and finance contracts. This category of information identifies all the bank accounts, credit cards, mortgages and financial contracts you have open. It may show what type of account they are, the dates you opened each account, your credit and overdraft limits on each account, your current balance on each account and your payment history and arrears if any.
What Are Credit Inquiries?
The credit inquires section of your credit report which companies or individuals have accessed your credit file within the past two years. There are two sections of this category. These sections are voluntary and involuntary access. Voluntary inquiries are your own personal requests for credit for example a personal loan. Whereas involuntary inquiries are financial services companies who order your report to make you a pre-approved credit offer.
Usually making an application for any kind of finance involves granting permission for personal credit searches to be carried out. So understand that each time you apply for a loan or financial service this acts as an authorization to your lender to obtain a copy of your credit report. They will normally tell you verbally that they will be accessing your credit report. You want to keep an eye on the volume of searches as too many can have a negative impact on your credit score. Another reason why your credit report matters as much as it does. [Check your credit score for free. ]
Understanding Public Records and Collections
Public record information includes bankruptcies, foreclosures, suits, wage garnishment, and liens. This information is collected from an entirely public database including state and county courthouses as well as information about overdue debt from collection agencies.
Information is Power in Your Hands
Now that you know what your credit report will contain and the reasons you should be checking it regularly, get your first report today and set up a reminder to regularly obtain a new report in the future. Checking your credit report on a regular basis will not only save you from a potential financial disaster like identity thief or fraud, but will also help you to better understand your credit standing, become a better lender, and will give you an idea of how to rebuild bad credit. What are you waiting for? Use our sources and get your free credit score today! This is a primary reason why your credit report matters so much.
Wrapping: Why Your Credit Report Matters
Now that you understand why your credit report matters, you will also appreciate that maintaining the very best quality of personal credit history does not just impact your financial health but also your personal health and wellbeing as well. If you are keen to stay mentally strong and in good physical condition then avoiding stress is a key indicator. Mitigating debt and financial pressure is a big part of this process. Your credit score is central to ensuring effective management and the good health of your personal finances.