Five Reasons to Annually Check Your Credit Reports

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Credit reports can both provide and determine valuable information about your life, such as the quality of your home, job, interest rates, and loans. While it is fortunate that credit reports can be freely accessed once a year, once from each major credit bureau, most credit users do not take advantage of this opportunity. The best alternative is getting a free credit report as soon as possible. This article covers five compelling reasons for checking your credit reports at least once a year, which can prevent unexpected and detrimental consequences for your livelihood.

1. It will help you find errors in your credit history.

According to the Federal Trade Commission, twenty five percent of people who check their credit reports detect suspicious information - which might turn out to be serious errors. Checking your credit is not enough to resolve these issues, as credit checks don’t reveal what has contributed to your credit score. However, they are the first step toward recovery. If you learn early on that there is an error, you can write to credit reporting company before it is too late, and before your information has negatively affected your credit transactions.

2. It will help you detect errors made by others.

Even while you may be conscientious of your credit information, it’s possible that it has been negatively affected by others’ transactions. If you are financially responsible for a child or a spouse, their financial mishaps can negatively affect your credit without your knowledge. Later you may need to take steps to improve your credit score. Checking your credit report can bring these things to light.

3. It is free to check one’s credit report once every twelve months.

The Fair and Accurate Credit Transaction of 2003 ensures that you can check your credit report once every twelve months with each major credit bureau without any economic or credit penalty. This can be done at Annual Credit Report. Not only will it not burden you financially, but it also will not hurt your credit score. Instead, checking your report has the potential of helping your score by keeping you up to date with any current issues or preventing them from happening in the future.

4. It will save you money on interest.

It is well-known that poor credit places a huge burden when taking out loans. Luckily, poor credit can be reversed and interest rates reduced with some simple proactive credit reviewing. Check your credit reports ahead of applying for a loan instead of right before, and you will stay informed of any potential errors that would affect your interest rates. This way, you can settle issues free of stress, create a plan on how to improve your credit, bring your reports back on track before making major economic decisions, and be prepared for a better spending experience.

5. It might prevent identity theft or fraud.

While sensational movies depict identity theft as something blatantly obvious, it is often undetectable, especially when the fraudulent transactions are quite small. In fact, they may be small enough that only detailed reviewing of your credit report will help you notice that anything is amiss.

If you do suspect that someone has been making transactions using your Social Security number, file a report for identity theft with the local authorities Another options is to place a fraud alert on your credit report. This requires identity verification prior to credit transactions. Placing a fraud alert on your credit report grants you free credit reports to help you ensure that the issue is resolved.

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