Four Great Reasons to Order a Credit Report

It is advised that you check your credit report every three months or so, depending on how neurotic you are.

Some people check it more, some much less, but either way, here are a few good reasons to order a credit report:

Identity Theft

The FTC estimates that as many as 9 million Americans have their identities stolen each year, and many of these affected consumers don’t realize anything has happened until they get a credit card statement or review their credit report (how to read your credit report).

Thieves can obtain your personal details through a variety of methods, including dumpster diving, credit card skimmers, phishing, or flat out theft.

If you order a free credit report you’ll be able to see exactly what’s being reported on your credit profile and report anything fraudulent or suspicious before it escalates and damages your credit profile.

Shopping for a Mortgage or an Auto Loan

If you’re in the market for a new home or a new car, or really any major purchase, you should have a good idea as to where you stand from a credit perspective. Knowing your credit score is essential to obtaining a solid interest rate, or getting any financing at all (what is a good credit score).

You should order a credit report long before you apply for a mortgage or a similar loan as it may take time to review and repair your credit score. If you rush into a major purchase without reviewing your credit you could end up with a sky-high interest rate and a major headache.

Fixing Mistakes and Errors

It’s very common to find mistakes on your credit report. In fact, most people have erroneous collections and other derogatory accounts that they had no idea about until they ordered a credit report. Medical collections seem to be the most common.

These errors can be devastating to your credit score and cause banks and lenders to decline new credit applications. By checking your credit report frequently, you’ll be able to stay on top of your many accounts and make sure nothing is causing your credit score to drop unnecessarily.

Knowing Your Credit Score

One final reason to order a credit report is simply to know where you stand. Aside from curiosity and bragging rights, knowing what your credit score is, along with what’s behind it is extremely important.

It’s one thing to assume you’ve got perfect credit and another to actually know it’s flawless. Many people are often surprised to see their credit score isn’t as high as they seemed to think, often because they don’t understand how credit works.

If you know where you stand (what is the average credit score), you can avoid surprises and high interest rates when applying for new loans, credit cards, and the like. Often times there are credit thresholds, and if your credit score is a few points below a certain mark, you could be denied financing or end up with a higher interest rate.

Credit Reporting Options

If you do decide to order a credit report, know your options. You can order a free credit report courtesy of the FTC (get a free credit report without a credit card), or enroll in a credit monitoring program with your bank, credit card issuer, or another third party.

Be advised that the free credit report from annualcreditreport.com does not contain a credit score. If you decide to use a non-government backed option to obtain a credit score, be sure to shop around to find the best deal . You can usually find a 30-day free trial option and cancel within that time to avoid being charged.

Related Topics:

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2. Free Credit Report, But No Free Credit Score
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