It should be at the top of the list of your personal financial practices to periodically check your credit report. A credit report will serve as a shining light on your financial record, enabling the lender to expose your personal payment history and creditworthiness, allowing them to determine whether or not to accept your loan and credit card application. You can also act as a sentinel against identity theft and consumer fraud with your credit report. That is why it is recommended to regularly check your credit report.
- Help you to know the impact of any missed payments: It might happen that you would often skip paying your credit card bills or loan EMIs. It can have a negative effect on your credit score to skip these payments. You will get to know just how much effect you have on your financial health due to missing or delaying your loan EMIs and credit card bills on time by checking your credit report.
- Informs you of your creditworthiness: Based on the estimate of your credit score, lenders and credit card issuers send your loans and credit card data to the credit bureaus. Testing your credit report will let you know your current credit score and, if it is not up to the mark, take corrective action to boost it. This would guarantee that, because of a low credit score, your loan or credit card application is not denied by your lender.
- Detecting and disrupting any errors: Incorrect records of your bank accounts or replication of the same loan or credit card account might also be on your credit report. In certain situations, your credit accounts can be combined with information from someone else that may adversely impact your credit score. At present, the only way to identify such incorrect or wrong information listed in your credit report is to review your credit report regularly. Upon noticing some dispute in your credit report, contact your lender or credit bureau immediately to resolve it as soon as possible.
- Helps in detecting identity theft: You can be a victim of fraud if you come across accounts that are not yours or names you don’t know, which may result in a decrease in your credit score. If you periodically check your credit report, you can easily detect such identity fraud and prevent anyone from misusing your identity, which would otherwise prove very expensive for you in the long run.
- Helps you keep an eye on your credit score: When you apply for loans or a credit card, getting a good credit score is crucial. You will keep an eye on your credit score and consider your current credit status by regularly checking your credit report. It is recommended that you take action to boost what would help you qualify for a better interest rate in the future if you come to realize that your credit score is not in good shape.
BOTTOM LINE
Regularly checking your credit reports will help you patch any discrepancies and search for signs that your identity has been stolen. And your credit score may be adversely influenced by these errors in your credit report. It is therefore critical for you to be aware of the details found in your credit report and how it affects the health of your credit. Whether you’re following this procedure faithfully. In order to get loans and credit cards at low-interest rates, you will also be able to boost and develop your credit score.
