Why You Should Check Your Credit Report Regularly

This is a guest post from Patrick from Cash Money Life. Veteran, father, husband, blogger and an all around swell guy.

Your credit report is one of the most important financial records you have when you are applying for a loan or trying to rent a house or apartment. But your credit report can also be used as a tool to help you monitor or improve your financial situation. That is why I recommend checking your credit report often for accuracy and/or fraud.

How often should you check your credit report
Creative Commons License photo credit: rightee

Check your credit report regularly

Since your credit report and score are so important, it makes sense to make sure they are accurate. You can get a free copy of your credit report from each main credit bureau once per year, and while these free credit reports don’t include a free copy of your credit score, there are ways to get your credit score for free as well – but more on that in a minute. First, we need to discuss why you need to check your credit report, and discuss some of the common errors found on credit reports.

Why you need to check your credit report

Your credit report is a history of each credit account in your name. The last thing you want is inaccurate information that causes you trouble down the road, or someone else accessing your credit profile (for example, ID thieves). The best way to maintain accuracy on your credit report is to check it often and verify the personal information listed on your report is accurate, and that there are no fraudulent activities going on.

Reasons you should check your credit report often:

Check for errors on your credit report

Errors happen – some of which may be honest mistakes, and some of which may indicate fraud. Be sure to check each line item carefully. It’s not uncommon for someone’s account to get on your credit report when their SSN is one or two digits off, or if they have the same name. Here is a list of common errors; you will need to contact the credit bureau that lists the error if you find any discrepancies.

Common credit report errors:

  • Incorrect personal information. Name, SSN, address, etc.
  • Incorrect/outdated account information. Have you recently closed an account, or changed credit limits?
  • Incorrect delinquencies or missed payments. Be sure to verify your payments through bank statements.
  • Missing Accounts. Do you have any accounts that are not listed? Find out why.
  • Duplicate Accounts. The same account could be listed twice, which could negatively affect your credit score.
  • Phantom Accounts. These could be accounts in your name that you never opened or an account that belongs to another person (usually with a similar name or SSN).
  • Negative issues over 7 years old. In most cases, your credit score should only list negative items going back 7 years. Contact the credit bureau to remove those items over 7 years old.

How to check your credit report for free

You can get a free copy of your credit report from each of the three major credit bureaus once per year. All you need to do is visit AnnualCreditReport.com and sign up for your free credit report. You can get a free credit report 3 times per year if you spread out which credit bureau you use to check your credit report. For example, get your free credit report from Experian, wait four months, get it from TransUnion, then 4 months later get it from Equifax. Use a calendar or e-mail reminder to keep track of your schedule.

Get your free FICO Credit score

Your FICO credit score is not included with your credit report, so if you want to check your credit score you will need to either pay for a copy of your credit score, or get your free FICO credit score by signing up for a free trial with a credit monitoring company, then canceling the service before the end of the free trial period. The free trial periods usually range from 7 to 30 days, which gives you enough time to receive a copy of your credit report and credit score. It’s a free way to stay up to date and monitor your credit.

 

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