Check Your Credit Report In Various Financial Situations |
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Your credit report is the index of your credit health and just as you need to ensure that you are healthy from every angle, you will have to check your credit report from each of the three major credit reporting agencies (Experian, Trans Union and Equifax) to get your complete financial scenario and become familiar with your credit history. Checking your credit report will always help you effectively no matter what the situation, whether you are applying for a credit card, loan, or mortgage. The usefulness of checking your credit report in different situations is described below. While applying for a credit card - Make sure that all information in your credit report is accurate while applying for a car loan, bank loan, or credit card. Any inquiry on your report can count against your credit rating and as such you should ensure that your application isn't rejected based on mistakes in the credit report. Co-Signed a Loan - The payment record of a family member or a friend whose loan you might have co-signed will also appear on your credit report. It is, therefore, necessary for you to check your credit report so that you know what is in your credit report and also to ensure that your credit is not affected. Inaccuracies might occur - A study by U.S. PIRG indicates that 70% of the credit reports have errors of some kind and 29% contained serious errors like false delinquencies and judgments that don't belong to the consumer. These mistakes can negatively affect your credit rating and as such it is essential to check your credit report for mistakes and get them rectified before any lender gets a wrong idea because of them. Shopping for mortgage - A mortgage report is prepared by mortgage lenders or companies and this report is used by lenders to decide whether or not to give a home loan and is compiled from credit reports from two or three credit bureaus. The mortgage credit reporting company buys these credit reports from the credit bureaus and manually checks out specific information such as employment, credit account balances and public record information after combining all the credit reports. You should, therefore, keep a track of your credit condition by checking your credit report. Renting - As apartment owners or managers check your credit report before offering a lease, it is wise to check your credit report on your own before apartment hunting. Divorce - If you get a divorce, you may not be aware of certain transactions that might negatively affect your credit since your credit might be combined with that of your spouse. As such, you should notify the three major credit-reporting agencies that your status has changed to single and you should furnish them with new addresses for both you and your ex-spouse specifying that all accounts should henceforth be reported separately to avoid transactions being reported on the wrong spouse's account. If one of you were to remarry, the records could get further mixed up. You need to check your credit report regularly to monitor the accurate evaluation of how the divorce is affecting you financially. Monitoring of fraud - You have to be vigilant of your credit by checking your credit report regularly as someone might be committing fraud by using your identity and applying for credit in your name. You also have to make sure that all information is correct and that all new inquiries and accounts are not fraudulent. If you suspect any fraud, ask your credit-reporting agency to put a fraud alert on your file. If you are self-employed - To build up your business and maintain your company you will always need financing and the stronger your credit, the greater will be your chances of getting the finance. It is, therefore, necessary that you check your credit report regularly and monitor your credit condition, Financial Planning - You should check your credit report at least once a year and review it with your financial advisor so that your financial condition is regularly and accurately assessed. |
