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Why Should I Check My Credit Report |
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Regular review of the accuracy of all information in your credit report is as important as an annual or biannual health check up. Several things like loan approval, insurance or even employment depend on its accuracy. If you don't carry out credit checks annually or every six months, one fine day, you may discover that your loan request has been denied just because of some inaccurate information or errors in your credit report.
There are several disadvantages of having a bad credit history. Because of it, you may be required to pay a higher interest rate on you car and mortgage. Insurance companies could deny your request or accommodate you in a higher risk category and ask you to pay higher premiums. Even your employment and promotion are dependent on your credit report to a great extent. Can you afford all these disadvantages for no apparent fault of your own? Therefore, it is better to verify the contents of your credit report from time to time. Who Can Access Your Credit Report? Credit reports are usually accessed by landlords, utility companies, credit unions, credit card companies, car dealers, mortgagors, investigators, lawyers, courts and anyone else who can provide a justification for doing so and/or has access to it because of being a credit reporting agency member. What To Check And How To Check It? Some items are common to all reports and these may be recorded under one of four categories: personal, reported accounts, public record, and inquiries. Personal Information: Along with your name and address, this category contains other information like marital status, change of name, both your and your spouse's employment, status within company, salary, and the names and addresses of all former employers. Reported Accounts: This category is further subdivided into two: monthly and default accounts Monthly Accounts: Your monthly account history is reported by financial institutions, finance companies, commercial lenders, charge card creditors, larger department stores, oil and gas companies, etc. These reports contain your name, nature of account (revolving, installment, etc.) account history, payment history, owner/s of the account (joint, etc.), credit limit, current balance, etc. Default Account: It contains information regarding a default payment by the consumer. It is reported by creditors like landlords, utility companies, insurance companies, local retailers, doctors, hospitals, etc. It contains information like your name and account information and a delinquency report that states the number of days (like 60, 90, or 120 days) past the due date. Public Information: This category contains legal public information, such as lawsuits, bankruptcies, liens, court judgments, etc. It may also include financial public records like charge accounts, loans and debts. Inquiries: This category contains information regarding important inquiries conducted by potential creditors, employers, landlords, or any other person/organization who have demanded a copy of your credit report within the past 12 months. These inquiries stay on your report for two years. A number of inquiries within a short period of time show your desperation for credit and these may discourage potential creditors from considering your case. This category also includes mailed unsolicited credit offers, which can also impact your loan approval efforts. Even if they are just promotional offers, they are still considered an inquiry. Conclusion From the above discussion, you can easily infer that credit reports and scores greatly influence the interest rate offered by a potential creditor. So, we should try to extend a positive image of our finance and debt management skills. If you're contemplating a major purchase in the near future, then you should try early to verify your credit report and get all incorrect and misleading information corrected, so that when the creditors check your report, it is near perfect. Therefore, it is very important to check your credit report regularly and get all incorrect, outdated, or redundant information corrected or deleted. Check your report entry by entry. Keep the credit agency legend nearby, so that you can also check coding compliance. Verify all information contained in your credit report and ascertain that the information in your report matches your own. |
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