Your credit report gives exhaustive information about your credit history. It will help to make a deal while applying for a loan. However, the deal can also be not done. Many people just don’t take care about that, they think it isn’t important to have a good credit score and just don’t monitor it.
Unfortunately, nowadays, people are living busy lives, so they don’t give appropriate attention to their credit profile You should know that if you won’t look after your credit report, it may cause some serious issues to you.
There are many factors that can influence your credit score, and you should know a lot about it in order to avoid “surprises”. Keeping an eye on your credit can help you buy a house, secure a job, and save money on insurance.
Every year, each consumer is entitled to one free credit report from each of the three bureaus: Experian, TransUnion, and Equifax. The information below will provide you with information that will explain why you should check up on your credit scores at least once a year.
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Why you should check your credit score
You were denied credit
In case you were confined from taking a loan or credit card, you may be provided with a free copy of your credit report from the bureau used by the bank to estimate your credit. For instance, if the bank ordered your credit report from TransUnion, you can obtain a free TransUnion report.
The instructions on how to order your report would be included in a rejection letter that the bank or credit card company will provide you with. A free report can be requested within 60 days of rejection.
Reviewing your report can help you to understand the rejection. Perhaps you have too many existing accounts, or negligence was declared in error. A free report will give you an opportunity to take the necessary steps to enhance your credit score or amend something declared in error.
Of course, you may be refused to take credit for some other reasons. In this case, you cannot receive a free report unless you’ve yet to file for your free annual report from each of the three credit bureaus. You can do this at AnnualCreditReport.com.
You plan to apply for a loan
Before you meet a lender to apply for a mortgage loan in order to buy something expensive, you should check your credit to prevent having some problems. If you have learned everything about your credit report, you will understand whether a lender will assent your request.
Keep in mind that your credit score will be decreased by each credit application, so it would be better to decrease the number of times lenders check your credit. Factors that can cause some issues to you for a loan are collection accounts, late payments, a poor credit score, and high balances.
If your credit is less than perfect, you should work through these credit issues before applying for a loan. For instance, you can refute errors on your credit report, pay off past due accounts, and decrease credit card balances. After you have done those changes, you can reapply for the credit card that you want.
To check for identity theft
You should be aware that it doesn’t require a big period of time to hack your account or to rob your personal information. People sometimes even don’t notice that they have faced this issue until their credit score lowers they locate defrauding accounts in their name. According to a fraud report issued by Javelin Strategy and Research, approximately 11.6 million people have faced this issue in 2011.
You may put a lock on your mailbox, shred your mail, and avoid unsecured websites, but even if you have made all those efforts, it doesn’t mean that you will be able to identity theft. On average, it takes from 200 to 500 hours for victims to repair the damage.
This issue will badly affect your credit score and will ruin your plans. At the very least, order your credit report at least once a year to ensure your credit profile remains accurate. For extra safety, you can sign up for a platform that observes your credit report daily for changes.
You cosigned a loan
It can help a friend or family fellow receive financing, but if they default, you’re responsible for the debt. However, if the person you’ve vouched for has trouble making payments on time, you’ll have a big problem with your credit score, since all of this information will show up on your report.
Even if think that this person is reliable and responsible, you should always think about the consequences. To reveal this problem before it will cause problems, you should check your report regularly. It will give you an opportunity to decide something before you have great problems with your credit.
If you’ve already ordered your free reports for the year through AnnualCreditReport.com, you can order additional reports directly from the credit bureaus for a fee. Ordering your own credit report won’t influence your credit score.
