Is It Important To Check My Credit Report?

Posted by Matt Douglas

December 17, 2009

As busy as people are today, it is not surprising that they do not even contemplate what may or may not be reported on their credit report. Because of this, many consumers are in the dark when it comes to knowing anything about their credit score.

In case you are unfamiliar with credit reporting, a credit report details all of a person’s financial history, good, bad, or indifferent. Your credit borrowing history and your ability to make payments on time are typical items which appear on your credit report. When you apply for credit is even noted on your credit history. This means if you apply for credit to purchase a car or apply for a credit card, your approval or denial of that credit request will appear on your credit report.

Most of the time when you apply for credit, the company will request a copy of your credit report. (Believe it or not, even just this request for your financial information will be recorded on your credit report!) The company will then review the credit report and determine if they feel you are a credit risk. If not, you will most likely receive the loan or credit card for which you were applying. Adversely, if you are determined to be a credit risk, your application will be denied.

Because your credit report plays such a major role in such things as purchasing a home, buying a new car, or obtaining a credit card, it is vitally important that consumers KNOW what is portrayed on their credit report. THINKING you know, is not enough. If you only THINK you know, you may be surprised the next time you apply for credit.

To request a copy of your credit report you can use one of the numerous online companies which provide this service or you can contact Experian, Equifax, or TransUnion, the three major credit reporting bureaus, for a copy. You have the legal right once every twelve months to request a copy of your credit history from these credit reporting bureaus.

Once you receive your credit reports, allow yourself a few minutes to sit down and review each of them. The purpose of this review is to make sure that your spending practices are reported accurately. You will want to make sure that your payment history is correctly stated, old and present addresses are accurate, etc. You will also want to make sure that any old debts which were overdue but, subsequently, paid, are reflected as such. (For overdue debts which eventually were paid, you might consider contacting the lender or collection agency to see if they will remove the debt from your credit report in its entirety.)

If you find any inaccurate or false information on your credit report, it can be corrected. A simple letter to the credit reporting agency explaining the purpose of your letter and outlining the information which needs to be corrected, along with proof of your claim, should result in the information being amended.

Many consumers do not understand the importance of a clean credit history. Often, they forget about that $30 bill that was in dispute and was then, unbeknownst to them, added to their credit report, or are unaware that they have been reported for being over their limit on a credit card because, in fact, the card was paid down the very next day. This is the very reason it is important to obtain a copy of your credit history and take some time to review the reports once they arrive. Just requesting the report, and then doing nothing with it, is useless.

At the very worst time, the importance of a clean credit report will dawn on you, maybe when you apply for a home loan. If you allow false or inaccurate entries to remain on your credit history, you should be prepared for high annual percentage rates (APRs). Don’t sit by and allow this to become your fate! Always KNOW what is contained on your credit report!

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Is It Important To Check My Credit Report?

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