Your credit score is a reflection of your responsible finance habits, or at times, the lack there of. Unfortunately, identity fraud has become an increasing concern for many Americans, but it doesn’t take a thief stealing your identity to put your credit score at a lower level than it deserves to be. There is also the possibility of human error or a simple computing mistake that could cause your credit to take a nose dive. For these reasons and more, it is important to check your credit score regularly.
Identity Fraud
Identity Fraud has become increasingly pervasive and, in many cases, unless you check your credit score, you’ll be unaware that someone has accessed your social security number or other personal information and is using your credit illegally. As a matter of fact, if you don’t check your credit report it could be months before the credit grantor, finally fed up with nonpayment, turns the account over to a collector who tracks you down and demands payment for a loan you never applied for.
Yet if you check your credit history on a routine basis, you have the best chance of detecting inaccuracies that would indicate whether or not your identity may have been compromised.
Financial Stability
Another reason to check your credit often is due to the fact that your credit report can have a dramatic impact on your financial stability.
We all know that you can obtain many benefits from having a good credit score, like higher credit limits, access to exclusive memberships and deals, better rates, and more. But if your report is poor, many options can actually become unavailable to you.
In this regard, it’s important for you to know what to expect when a lender runs a credit check on you. Don’t get caught off guard by not being aware of what your current rating is.
Inaccurate Information
There is also the fact that many credit reports contain inaccuracies that can harm your credit rating, leading to rejections when you apply for loans, insurance or even a job.
Often the result of simple human error, they can be caused by a number of reasons including a simple clerical error, a computer glitch, or perhaps if your file is confused or mixed with that of someone with a similar name.
Regular Monitoring
If you monitor your credit report regularly, you’ll be able to deal with inaccuracies that can harm your credit standing as they arise rather than letting them go unnoticed and be causing harm to your financial reputation without your knowledge.
Gerri Detweiler, Director of Consumer Education for Credit.com, adds “I found a serious mistake on my credit reports, and it’s possible you may find wrong information on yours. It’s best to learn about that well before you’re in the process of a loan application, and you have plenty of time to dispute it. (The first time it occurred, I was in the midst of financing a new car. Talk about panic!) In fact, disputing a credit report mistake can derail a mortgage loan application that’s already in process.”
All of this information should help you understand how important it is to stay on top of your credit score. Your ability to borrow and your financial reputation is at stake.