Why It’s Important to Request Your 3 Credit Reports and Review Them Regularly
The data on your credit study can touch much of your life — the home you live in, the job you go, how much money you tin can borrow and how much involvement you'll pay. Simply even though you lot can review these reports for gratis every 12 months, about two in three adults said they haven't, according to a 2015 National Foundation of Credit Counseling study sponsored by NerdWallet. For some, that could take big consequences.
Here are five reasons yous should check your credit reports at least once every year.
1. Information technology can help yous discover and dispute errors.
About one in four people identified potential errors that might touch their credit on ane of their credit reports, according to a study by the Federal Trade Commission. Credit scores — the three-digit numbers indicating borrowing risk — may tell your when your credit changes, but won't tell you why, or whether the change is due to a reporting mistake. Checking your credit report makes it easier to uncover these mistakes.
If your report includes information from someone else's report (known every bit a mixed file) or contains other inaccuracies, information technology may bear upon your credit and accept weeks to right. You don't want to delay resolving these issues, peculiarly if you'll be applying for loans anytime soon. Hither'south how yous can file a written dispute to the credit reporting company and set the record straight.
two. Your credit may be affected by others' mistakes.
You may be conscientious nigh paying bills on fourth dimension, just others may notwithstanding make errors that could hurt your credit, and you may not realize it. If you cosign for your kid's credit card and he or she is tardily on a payment, your credit may take a hit. Unless your kid lets you lot know, or gives you admission to the account, you may not find out until you check your credit report.
"A lot of times, people don't even realize they're hurting the people who helped them," says Tracy Becker, a credit practiced at North Shore Advisory, in Tarrytown, Due north.Y..
Checking your credit study tin can exist a painful way to larn about miscommunications and failings. Merely information technology tin can also serve as a reminder to monitor things that might usually escape your observe, such as medical bills that were supposed to be covered past insurance companies, or payments that were supposed to be made by bookkeepers.
three. Yous might terminate identity theft and credit card fraud early on.
If someone else has been using your Social Security number to apply for credit, or making purchases with your payment information, y'all may not observe the signs unless you take a close look at your credit reports.
"Some of these transactions are very small," says Richard Rosso, a certified financial planner at Clarity Fiscal in Houston. "They fly nether the radar. And so you go hit with a big one."
If yous notice an unfamiliar account or research, think the issuer and find out how it ended upward on your study. If necessary, file an Identity Theft Report and freeze or place fraud alerts on your credit reports to prevent further harm. Fraud alerts, which are free, require issuers to contact you and confirm your identity before extending credit to y'all. After placing a fraud alert on your account, you can get additional complimentary credit reports to make sure the fraudulent accounts were removed.
4. You'll save money by existence proactive most your credit.
Good credit could potentially save you thousands of dollars in interest payments over the course of your life.
If y'all're happy with your credit now, reviewing all your credit reports at least once a year and checking for whatever potential errors can ensure it stays protected year-round. This way, if you lot use for a loan, you probably won't have to scramble at the terminal minute to dispute errors, and y'all likely won't have to shell out more in interest than you'd otherwise pay.
If you have poor credit, reviewing your credit reports tin can help you figure out how to rebuild information technology. Instead of guessing at the problem, you'll be able to see which negatives are bringing information technology downwards.
5. Did we mention it'southward free?
Under the Fair and Accurate Credit Transactions Act of 2003, you have the right to view your credit reports from each of the three major credit bureaus for gratuitous once every 12 months. Schedule credit check-ins near other significant annual events, such as yearly physicals, Rosso says, and you'll have an easier time remembering them.
To get your gratuitous reports, request them from the federally authorized website AnnualCreditReport.com. Reverse to the myth, pulling your own report won't hurt your credit. Usually, the whole process takes no longer than 10 minutes, and it tin can save yous a lot of hassle later on.
Rosso says, "If I can get people to bank check their credit reports in one case a year, that'southward a proficient affair."
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Claire Davidson is a staff author at NerdWallet, a personal finance website. Email: claire@nerdwallet.com. Twitter: @ideclaire7.
NerdWallet is a USA TODAY content partner providing full general news, commentary and coverage from around the Web. Its content is produced independently of The states TODAY.
Source: https://www.usatoday.com/story/money/personalfinance/2015/08/22/nerdwallet-check-your-credit-reports/32129411/
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