If you’re like most people, the only time you think about your credit score is when you’re about to need a loan. Granted, this isn’t a topic that comes up in everyday conversation routinely, so it isn’t likely to be top of mind. However, there are some very important reasons to review your credit report on an annual basis.
1) t’s Free
By law you are entitled to one free copy of your credit report each year. You may encounter all sorts of ads touting this as a service. But there is only one source from which you can acquire reports from all three of the major reporting agencies (Equifax, Experian and TransUnion). AnnualCreditReport.com is authorized by the Federal government to provide this information to consumers.
2) Minimize the Consequences of Identity Theft
Your credit history is an asset. And, as with any other asset, it has to be managed carefully if it is to serve you best. When you ignore your credit history, you leave yourself vulnerable to all sorts of maladies. Chief among these is identity theft. While the temptation might be great to “let sleeping dogs lie”, this is a bad idea when it comes to your good name. Someone could be using your credit right now without your permission. What’s more, if they’re careful about it, you’ll have no way of knowing—until it’s too late.
3) Get the Interest Rates You Deserve
Lenders set interest rates based upon the perceived risk a borrower represents. So sure, you can get a loan if your credit is less than stellar, however it will cost you more in interest payments. Meanwhile, if you have a very strong credit history, you’re entitled to the lowest rates available.
However, if you don’t know just how good your credit is, you’ll be at the mercy of someone who does and they might not always be interested in making sure you get what you’ve earned. After all, the more interest they can get you to pay, the more profit they’ll make on your loan.
This is particularly important if you’re recovering from past credit problems—or experiencing them. If you find you’re in more trouble than you realized and credit card debt is a significant aspect of the problem, consulting a company like Freedom Debt Relief could help you find the best options for getting that debt under control.
4) You can Respond to Changes Sooner
How can you fix a problem if you don’t know it exists? If you keep a watchful eye on your credit history, you’ll notice changes more quickly and you’ll be better positioned to deal with them.
People make mistakes all the time. A lot of names are similar and one misplaced digit in a Social Security Number could get someone else’s malfeasances attributed to you.
Let’s say an error shows up on your report, but you aren’t in the habit of checking it each year. When you finally do get around to looking at it, the problem will have been there so long, getting it undone can be considerably more difficult than if you caught it early.
These are but four of the many reasons to review your credit report on an annual basis. Even better, an inquiry of this nature, made once a year, does not impact your credit score negatively. However, it can make a positive difference in your rating. Why leave things to chance when it’s easy to do and costs nothing? Go to AnnualCreditReport.com and review yours right now.