The two most important reasons to check your free credit report on a regular basis are:
- Checking for Errors and Wrong Information and
- Before Applying For A Major Loan
Checking for Possible Errors And Wrong Items On the Free Credit Report
Sometime back it was estimated in a study that more than 70% of credit reports contain some sort of an error of you. As mundane and small the error may be it has the potential of affecting your credit score.
Even if it does not affect the credit rating it has the potential of resulting in an application getting the lady in the approval process or even getting denied.
Viewing your credit report at least once a year from all of the three credit bureaus is important because the information on different credit files may differ.
A lender may use your credit report from any of the three credit use all marched report from all three. Wrong and in inaccurate information that is hurting your credit score may affect the creditor’s decision in any case. For this reason you should check your credit report and dispute any error with the credit bureau as is your right. This also makes it mandatory for the credit bureaus to investigate each claim off a dispute by the consumer.
Checking your credit report and filing disputes with the credit agency is the foremost method of removing wrongly reported information from your credit report.
Being Aware Of Your Credit History
The second reason for checking your credit report is to know what your credit rating is like before you apply for a major form of credit. Most of the people get a rude shock when their credit application is denied and they cannot figure out why. They are in for an even nasty surprise when the view their credit report. Factors such as inadequate debt of history, inadequate mix of credit or one late payment can affect the decision-making of the lender.
You can address all these factors if you use your credit report in time.
If you figure that in order to improve your credit report and credit rating you need a few months, then it is better to take this time to improve the information on your credit report before applying for credit.
Viewing a credit report may surprise you. Even people without any credit problems have discovered issues on their free credit report that is detrimental to their credit rating. Information like a reported late payment the one time that you forgot to make the credit card payment on time
Information on your credit report about a single instance of late payment will not affect your credit score in the long run.
While credit scores consider credit history and it is likely that a sigular item like that will not affect your credit score in the long run. But is it is recent, then it may interfere with you getting a new loan.
An old account that you paid off is still showing on the credit report as ‘unpaid’ or ‘settled’ instead of ‘paid and closed’.
Either way, checking your free credit report will present you with the opportunity of rectifying whatever information that you can either by disputing or by contacting the creditor and requesting that the information be taken off, specially if you are an existing customer.
Wrong information on your credit report can either be removed by disputing it with the credit bureau or contacting the lender to correct it from his end.