What is a credit report, and why should I check it regularly?

What is a credit report?

A credit report offers vital information about your credit history. The information in your credit report serves as a reference point for financial institutions considering your creditworthiness. You should check your personal credit report at least twice a year to make sure that the information is correct.

Your credit report will contain information on whether or not you have missed, or have been late on your payments in the past (and how late you were). It will also provide details such as your current and previous addresses, social security number, any credit card accounts and current balances you may have, as well as past credit card accounts (often referred to as “Revolving Credit”) even if those accounts have been closed or canceled.

This report also lists any auto loans and mortgages (along with balances and how diligent you are about making the payments), or any other sort of loan or credit which you were issued, providing the lender reports the info to the credit bureaus on a regular basis, most of them do. Also, the number of times you have recently applied for credit (credit inquiries) will be available to view as well, along with information on any collections, past due accounts, that sort of thing.

is one of the fastest-rising white collar crimes in America. It takes an identity thief only a couple of seconds to steal your information and possibly cause damage your credit report. For many people, inaccuracies, unknown accounts, or strange account activity in your credit report is the first sign of identity theft. Checking it on a regular basis is an excellent way to ensure it is 100% accurate, and will help protect you from this damaging crime.

Your credit report should be monitored on a regular basis. If your goal is to protect yourself from , or to keep a close eye on your report and score to guard against errors on the part of your creditors, checking your credit report once a year is not enough. Personally, I check my credit report and score at least 4 times a year. Examining my credit report at least every few months ensures that no errors slip by causing your overall credit worthiness (or in other words, the way you look to lenders) to decline.

It’s also an excellent idea to check your credit report and credit score right before you make any large purchases (house, car, boat etc.). Doing this ensures that you are informed about what the lender is seeing on your credit report, and there are no surprises in store for you at the dealership, or bank, about your credit worthiness. The better you look to lenders, the better chance you will have of getting those “1.9% interest” or “0% interest” offers, which in the long run can save you a significant amount of money in interest on your purchase!

To find out how to get your free credit score online, check out our page on How to get an absolutely free credit score. For more information about credit scores, be sure to check out our what is a credit score page.

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