When was the last time you checked your credit? Was it the last time you bought a car? The last time you refinanced or purchased your home? Or years ago, or so far back you’re not even sure?
Well, just like getting your teeth cleaned at the dentist, getting your oil changed, and filing your taxes, you should be checking your credit report carefully at regular periods.
However, studies show that 42% of Americans don’t regularly check their credit!
So, unless you’re apply for new credit accounts, or trying to improve your score for a big purchase like a home loan, or see evidence of identity theft, do you really need to go through the trouble of looking up your FICO?
Why should you check your credit regularly?
Your credit may have errors:
Did you know that your credit report may have errors? A study by the Federal Trade Commission (FTC) found that more than 1 in 5 credit reports (21%) contain errors. Even worse, 5% of consumers suffer through errors so serious that they are continuously overcharged for credit card debts, auto loans, insurance policies and other payments.
Over time, these errors may cause serious damage – not only to your credit score, but to your finances and by extension to your life. In fact, credit report errors may result in a lower credit score and a higher interest rate on a mortgage, a turn down on a zero-interest credit card, lower loan limits on an auto or student loan, higher insurance rates, and in some cases even cost you that dream job.
The good news is that 79% of consumers who disputed credit report errors were successful in removing them
Hacks, breaches, and ID theft:
I’m sure you’ve heard the news about the massive data breach at Equifax, one of the big three credit reporting bureaus. It’s expected that up to 143 million Americans – or just about half of all adults in the U.S.- had their data or sensitive financial information stolen.
It’s quite possible that your information was stolen, too, and that very well could mean ID theft or financial fraud is coming your way.
- Last year, there were an estimated 15.4 million victims of ID theft and fraud, costing the victims more than $16 billion!
- A new study by Bankrate.com found that at least 41 million Americans have already been a victim of ID theft, about one in six adults. Additionally, 50% know someone who has had their ID stolen.
- About 50% of all victims realize that their identity has been stolen within three months.
- But about 15% don’t learn of their ID theft for four years or longer!
- 64% of ID theft improprieties and fraud involve stolen credit card accounts.
- 34% involve misuses of bank accounts and debit cards.
If a cybercriminal gets a hold of your data, passwords, or even basic information like name, address, birthdate, etc., it’s easy for them to sell your info on the dark web or open new credit card or bank accounts. But all of this can be identified and taken care of very early, before the damage is done, just by checking your credit regularly.
Here is when you should check your credit:
In advance of a loan or big purchase
If you plan on refinancing your home, buying a home with a mortgage, applying for a new credit card, business loan, or student loans, etc. you should check your credit scores at least a few months ahead of time. Not only will you be able to research what rates and terms available to you based on your credit scores this practice will help you to become a smarter consumer, and hopefully you’ll be able to identify and update any issues on your credit report ahead of time.
Just like paying your taxes, your annual doctor’s visit, or spring cleaning, it’s recommended that you give your credit report a thorough review once a year. Each of the three major credit reporting agencies (Experian and TransUnion and Equifax), will give you your credit report for free once a year. If you stagger your requests for those reports every four months with a different bureau, you’ll have a full survey of your activity over time. Remember that these bureaus act independently, and so a credit issue may not be discovered for many months if the credit issue is not on the credit bureau you pull.
These days, wise consumers conduct at least a quick once-over of their credit every single month. The best way to do this is by looking at your credit card statement, which should provide an updated credit score. While these scores may not be consistent across all reports and bureaus, they will give you a good indicator of general trends and what’s going on with your credit.
Here is where you can check your credit and all three scores without the credit check showing up as an inquiry on your report:
Also, you may check your credit and credit scores at each bureau individually at:
With these different periodic checks, you should feel confident that your credit is being watched sufficiently and you’re well protected! Contact me if you have more questions regarding your credit!
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