Your Credit Report

The Importance of Checking Your Credit Report

Your credit report is a very important tool to use in managing your credit. As a result, you need to check your credit report regularly. By regularly, I mean at minimum, once or twice per year. I have been told that you can check your credit or more appropriately monitor your credit every 3 or 4 months, just to make sure that your identity hasn't been stolen.

While it is true that credit reporting agencies penalize you if your credit is checked too often, they don't penalize as heavily if it is you checking your own credit report. It is more of a defensive mechanism that they use to figure out when people are in financial trouble. If you get 10 different credit card companies pulling your report, because you have been applying for a credit card with every company out there, it is a major red flag to the credit card companies and your rates may go up and your credit scores will most likely go down.

You are allowed one free report each year from each of the credit bureaus. It would be extremely wise of you to take advantage of that free report. It is also important for you to check the accuracy of the information on your credit report. Your information may be accurate with one credit bureau, but inaccurate with the other two credit reporting agencies. False information on your credit report can drive down your credit score. By simply making a few corrections on your report, be it the correct spelling of your name, current and previous addresses, open accounts, employer information, etc. your scores may get a boost. Remember, it is very important to make sure that the information stored by all three credit bureaus is accurate and the same. 

You can get your free annual credit report at: www.annualcreditreport.com.