I can’t underscore the benefits of ordering your credit report annually. Financial experts recommend this move, but sadly, many consumers never think about their personal credit. It’s not until they’re rejected for a credit card or loan that they understand the importance of regular monitoring. Even if you’ve never checked your report in the past, you can start anew. Here are seven benefits of ordering your credit report annually.
1. Check for Identity Theft
One of the main benefits of ordering your credit report annually is the ability to identify signs of identity theft early. This is a real problem, and it’s the fastest growing crime in the United States. Identity theft includes someone stealing your credit card or personal information for financial gain. This person can open bank accounts in your name and apply for loans in your name.
2. Check Your Credit Card Balances
The amount you owe your creditors can have an impact on your credit score. For this reason, it’s important to monitor your credit report and make sure that creditors report accurate information. You may pay off a credit card, yet your credit report reveals a higher balance. When applying for a loan or an additional credit card, this error can stop approvals.
5. Look for Other Mistakes
Likewise, a creditor may report another person’s information on your credit report. This can be equally damaging to your score, especially if the person maintains a horrible credit record. Don’t let another person’s mistakes ruin your credit. Order your report annually and thoroughly check the document for unfamiliar accounts. Bring mistakes to your creditor’s attention.
4. Confirm Personal Information
Checking your credit report once a year also confirms the accuracy of your personal information. If you moved recently or recently changed your name, your credit report may not reflect these changes. If information on your credit report doesn’t match the information on a credit application, you may be denied by a creditor.
5. Know Your Odds
When applying for any type of loan or credit card, it helps to know your odds before submitting your application. Because every credit application can reduce your credit score, knowing where you stand can help you determine whether now is the best time to apply for financing. If your credit report reveals issues, you can postpone applying for credit and make necessary improvements.
6. Check the Status of a Cosigned Loan
Maybe you cosigned a loan for your child, a sibling or a close friend. This is dangerous, but cosigning can help someone build their credit history. If you decide to cosign, closely monitor the primary account holder’s account activity. Since this account will also appear on your credit report, ordering your report annually is the best way to keep tabs on the account.
7. Because It’s Free
You can check your credit report as often as you like by visiting the official website of each credit bureau - but there’s a cost. For a free report every year, go to AnnualCreditReport.com. This is the only agency authorized to give free credit reports to each consumer. It only takes a few minutes to order your reports, and reports are viewable from your computer.
Stop wondering about your credit and take action. The contents of your credit report have a significant impact on your personal finances. For this reason, you shouldn’t live in the dark. When was the last time you checked your credit report?