Even though consumers have the right to obtain a free copy of their credit report three times a year, one from each of the three major credit bureaus, many consumers never do. Of course, they might be aware that lenders and credit card companies are accessing their credit reports and assume that everything is okay since they get approved for whatever it was that they applied for.
However, it is better to check into your credit report on your own to check its accuracy as well as to check for any suspicious activity. Inaccurate information on your credit report can lower your credit score, thereby raising the interest rates that you are offered on a wide variety of financial products including home equity loans, personal loans, car loans, lines of credit, and more. Removing this inaccurate data can save you money on future loans.
Plus, monitoring your credit report might help you to spot the activity of an identity thief. Once an identity thief gets your confidential information, he generally goes about the business of opening new credit card accounts or obtaining loans under your name. Spotting this activity in the early stages is the best way to avoid the damage that it can inflict on your credit history as well as your ability to obtain new credit.
Credit reports include a wide range of information. They reflect your spending habits, good or bad. Plus, they include important details about a consumer’s financial health. All of this information is used by lenders not only to determine whether they should extend credit to you, but also, how much they should loan you and at what interest rate. In fact, even prospective employers will check into an applicant’s credit report in order to determine the feasibility of hiring a particular individual.
However, it is also important to understand that not all credit bureaus operate in exactly the same manner. They each have their own formulas for calculating an individual’s score, often relying on slightly different pieces of information.
Most credit reports contain personal information about the individual’s current and past address as well as the employment history. Some credit bureaus even check as far back as the individual’s first job. Credit reports also include information on a variety of loans including mortgage loans, automobile loans, home equity loans, home equity lines of credit, and personal loans.
Credit reports also contain information on store credit card accounts, credit card accounts, and the number of credit inquiries that were recently undergone. Information on tax liens, delinquencies, defaults, bankruptcies, and foreclosures also show up on credit reports. A number of legal matters will also appear on some credit reports including arrests, convictions, and lawsuits.
If you haven’t already checked into your credit report, you should make it a point to do so today. Find out what’s in your credit report and discover what lenders know about you.