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Top 5 Reasons To Check Your Credit Report Regularly
#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.
© 2004
Author: James H. Dimmitt
jimdim815@aol.com
James is editor of "To Your Credit" a FREE weekly newsletter
to help you manage your personal finances. You can subscribe to
his newsletter and also get a FREE copy of your credit report
when you visit: http://www.yourfreecreditreportnow.com
MORE RESOURCES:
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