Hello again friends and followers,
I shared some credit score basics in my blog The Fico 5! last month. Today, I am going to begin talking about the most overlooked piece of the credit puzzle – the CREDIT REPORT.
First of all, let’s dispel the myth that looking at your credit report hurts your credit score. It’s simply not true! In fact, the Consumer Financial Protection Bureau advises you to check yours at least once a year. Furthermore, federal law allows you to request a FREE copy from each major national credit reporting agency (Equifax, Experian, & TransUnion) every 12 months from www.annualcreditreport.com, the only authorized source. Not only do I highly recommend this website, I use it for myself to review my credit information each year!
Now that you know where to obtain your credit reports. Let’s move on to the WHY. You should check your credit reports on an annual basis for the following reasons:
- To look for mistakes that could hurt your ability to get credit
- To make sure your information is correct and up-to-date
- To guard yourself against identity theft
Credit reports are not immune to errors. Here are a few common mistakes:
- Wrong name spelling, address, phone number, or Social Security number
- Credit lines, accounts, or loans which you did not open or apply for
- Incorrect late payments, balances, or credit limits
- Duplicate accounts or closed accounts listed as open
These mistakes can make borrowing more expensive or even prevent you from borrowing altogether. It is your responsibility to make sure your information is being reported correctly. You are your best advocate!
Come back in a couple weeks for PART 2 of this series where I will walk you through each credit report section and help you understand the dispute process for correcting your credit report errors.
Until next time, keep calm and keep up with the CASH blog!