Top 5 reasons to check your
credit report regularly
by: James H. Dimmitt
#1 Make sure mistakes aren't hurting
your credit.
Reviewing your credit report can help
you avoid costly errors. In one recent study, more than 50% of the
credit reports checked contained errors. Other studies have shown
similar results with as high as a 70% error rate. The most common
error occurs when the information of another person, with a similar
name or account number, is recorded in your credit profile.
#2 Track your history of payments.
Potential lenders want to see a
history of timely payments before they’ll consider offering you a
loan or credit. Check your report to see that your payments are being
reported accurately to the credit reporting agency (CRA). A history of
late payments will result in higher interest rates being charged or
having your credit application or a loan denied. Late payments will
also lower your FICO score.
#3 Protect against potential identity
theft.
Identity theft has become the fastest
growing crime in our nation. Identity theft complaints jumped 75% from
last year according to a recent Federal Trade Commission report. The
monetary loss from identity theft crimes skyrocketed to a combined $53
billion in 2002! Accounts that appear on your credit report that
weren’t opened by you could be a sign of identity theft. Report any
such occurrences to all three major credit bureaus immediately and
have them place a fraud alert on your account. The three bureaus can
be reached at:
Equifax 800-997-2493 www.equifax.com
TransUnion 800-888-4213 www.transunion.com
Experian 888-397-3742 www.experian.com
#4 Keep your inquiries to a minimum.
Make sure all of the listed inquiries
were authorized. If there are unauthorized inquiries, write to the
credit bureau and to the company that made the inquiry informing them
that you did not authorize the inquiry and to remove it from your
credit file. Potential creditors can regard too many inquiries within
a short period of time (30-60 days) as a negative and can result in
the refusal to extend further credit.
#5 Stay on top of your credit without
hurting your credit score.
A credit score, also called a FICO
score, is a numerical grade given to each consumer . Your grade or
score is an analysis of your credit risk based on your credit history.
Credit scores range from 300 to 900, and those with scores in the
range of 640 to 700 are considered excellent credit risks. Those with
FICO scores below 500 are considered to have the highest risk of
defaulting on a loan and therefore most lenders won’t even consider
them. Consumers with higher credit scores receive the best rates and
terms on credit and loans.
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