Top Reasons to Check Your Credit Report

By Devon McCollum

There are so many reasons why you should get a copy of your credit report and review it. Credit is such an important part of a person's life; it is almost as important as money itself. Without credit, you will find yourself limited on necessary purchases, including major purchases that will affect your life for many years.

Credit reports list your personal information such as spouses, previous addresses, previous and current employment, and of course, your credit history. Also, your credit report reveals who has recently viewed it, perhaps without your knowledge or consent. These could be inquiries based on credit cards and department store cards you have applied for and apartment leasing inquiries. Some employers check credit histories.

Hundreds of thousands of people are victims of identity theft every year, and many do not realize it until it is too late. This is not something you want to discover when you're applying for an auto or home loan. Identity theft is serious business, and it can quickly ruin your credit history. Removing fraudulent information on your credit reports due to identity theft can take months to complete, even with a court order.

When you receive your credit report, review each listed creditor carefully. Should you have questions about a creditor listed on your report, contact the company listed or the credit reporting agency (TransUnion, Equifax, or Experion) and discuss your concern with them. The credit reporting agency will give you instructions on what to do if you have been the victim of identity theft, or if you wish to remove incorrect information on the report.

One small error on your credit report could mean that you will be denied the credit you have worked so hard to earn - and that you deserve. It is not uncommon for creditors to erroneously update information, such as debts that you have paid off and debts that have simply fallen off your credit records over time. Computers are not perfect; false information could have been transmitted to the credit reporting agencies.

An unfortunate example of a computer glitch is one that happened in Washington State. A woman was purchasing a used vehicle with an auto loan through a major auto financing company. She was working hard to restore her credit, and had been consistently making her payments well ahead of schedule. Late one evening, she awoke to find her car being towed. Upon asking the tow truck driver why he was towing her car, he told her that the financing company had demanded the vehicle be repossessed. She called the financing company the next day to find that they had experienced computer problems and the car was repossessed in error. This erroneous repossession was on her credit report for months, but eventually was erased because she was diligent in demanding it be removed. While credit reporting agencies are usually accurate, it is better to be safe than sorry when it comes to protecting your credit.

Lastly, some people fail to get their credit reports because they believe that their credit is bad or beyond repair. Consumers are often surprised that their credit isn't as bad as they originally thought. Even if you suspect your credit is less than desirable, you should know exactly how bad it is so that you can take steps to repair it. You can't fix something unless you know how badly it is broken.

© Doityourself.com 2006