4 Compelling Reasons You Need to Check Your Credit Report

Posted by Chris on February 10, 2015

Lots of people don't check their credit report or scores on a regular basis. Too many consumers don't understand the link between regular credit report checks and good credit maintenance, and "out of sight is out of mind" can be a common way of thinking all too often.

When you start to check your credit report and score regularly, you'll start to understand how you can build better credit and manage your debt more efficiently. All while maintaining a better credit score.

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Protect Yourself Against Identity Theft

One big reason to check your credit report is that others may be trying to scam the system by stealing your identity and taking out credit in your name. Many recent news reports have uncovered the uptick of identity scams in recent months. One way that identity thieves can get a hold of your information is through a recent move where you may have failed to change your address, which makes it easier for identity thieves to intercept mail with your confidential information.

Due to the variety of sneaky ways that identity thieves can get ahold of your information, be sure to check your credit report before you wind up in serious financial trouble or ruination of a great credit score. 

Look Out for Errors

This page from Kiplinger shows how many of our credit accounts -- about one-quarter of all FICO reports, according to this report -- contain actual errors. Companies often file credit judgments that are not based on fact -- the amounts might be wrong, or there may not be any debt whatsoever. Mistakes in customer identifiers such as Social Security number and date of birth can cause these kinds of mistakes, but there are many other scenarios where errors end up on your credit.

By checking your credit report, you can spot these and correct them. Use a credit check to discover problems like: 

  • Missing accounts
  • Duplicate accounts
  • Incorrect delinquencies
  • Invented or "padded" debt amounts
  • Contestable credit charges

Build a Basis for Dispute

In some of the instances above, companies may have filed charges against an individual that may be arguable from a financial perspective. For example, health care providers often bill large amounts of money that patients can contest or appeal after the fact. When you check your credit report and get a heads-up that the charge has been filed, you can take the opportunity to file an appeal with the credit company or other party to stop bad debt before it happens. 

Build Better Credit

You can also use the information that you get from your credit record to build better credit. Look at your FICO score and what it is made up of, and then take a look at your existing credit history. You may see how opening a new credit line, paying off a judgment or doing other simple financial activities can give you a big boost in your overall credit score.

If you want more tips on improving your credit and saving thousands of dollars on things like mortgages, car loans and big expenses then download our free guide that has an entire section on building awesome credit.

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Topics: Credit 101