Many people think that their credit reports reflect only up-to-date, accurate information, but unfortunately many people would be wrong. About 79 percent of reports contain some type of error, with 25 percent containing errors serious enough that lenders will deny you new lines of credit. Here are five reasons you should make sure that your credit report is up-to-date.
With over three-quarters of credit reports containing some kind of error, you need to make sure that you check your credit report every six months for any inaccuracies. Make sure all of the personal data on your report is accurate, including your name, address and social security number.
Double check to make sure that each account listed on your credit history is really yours. Make sure that every current account in good standing is included in your credit history and that each account is only listed one time. Nearly one-quarter of credit reports list the same loan or mortgage twice.
Read your credit history carefully, making sure that each credit limit is correct and every date an account was opened is accurate. Your credit utilization ratio and the length of your credit history are both important factors in determining your credit score.
2. Identity Theft
Identity theft is another reason you must check your credit report regularly. This crime involves a thief using your personal data to open up new credit accounts and accumulate all kinds of debt under your name. Most people don’t realize their identities have been stolen until collection agencies track them down for non-payment.
Regularly check the statements for your bank accounts as well. Once someone has your personal data, the identity thief can quickly drain your checking or savings account.
3. Unauthorized Charges
Sometimes credit account numbers or the actual credit cards themselves are stolen, making it easy for the thief to make all kinds of unauthorized charges on your accounts. Although you might be protected from actually having to pay off those unauthorized charges, all of the activity can have a negative effect on your credit history.
Make sure your credit history is up-to-date and you’ll catch any unauthorized charges and have them corrected before too much damage is done.
4. Tracking Your Payments
One of the most important factors for potential lenders is that you have a history of making timely payments. Bear in mind that even though you send in your check on time, a delivery delay can cause you to become delinquent.
Monitor your credit report and if you spot any payment errors, call your lender and explain the situation. They should adjust your information so your payment is listed as being on time.
Yet another reason you should keep your credit report up-to-date is to find out who has been making inquiries on your report. Potential lenders and potential employers both check out credit histories.
If you’ve been shopping around for new lines of credit or applying for jobs, all of those inquires add up, which creditors typically see as a big red flag. Make sure that every inquiry is one that you authorized.
In summary, you need to keep your credit report up-to-date for several very good reasons. A high percentage of credit reports contain errors, which you’ll want to correct. Reading your report will help you keep track of inquiries, payments and unauthorized charges.
Also check the financial statements for all of your basic bank accounts to make sure your identity hasn’t been stolen.
When was the last time you checked your credit report?