You Need to Monitor Your Credit Report
Now that we seem to be in a new era of tighter credit, your credit report is even more important than ever. The simple fact is, your credit report can have a massive impact on your life.
For example, virtually any time you apply for credit – whether it is a loan for a car, an extension to your mortgage, or an account at your favorite grocery store the people who look after deciding if you are credit worthy are going to check your credit report.
It seems that sometimes your credit report is the only thing they check. If it comes up looking rosy then you are good to go – you will probably get the credit you are after.
On the other hand, if your credit report comes back looking not so good you’ll probably be turned down, or at least the interest rate they offer you will be quite a bit higher.
The most significant reason you should keep tabs on your credit report is that it may be out of date or may contain information that is not accurate. If you are able to get a copy of your report, you can cross-check it for potential mistakes, and monitor your future financial behavior in order to get it into better shape.
Going through this process is especially important if you have gone through bankruptcy. As you probably know, bankruptcy will have erased some or all of your debts, so make sure that your credit report reflects these changes.
Even after you have filed for bankruptcy, you will soon have to begin rebuilding your credit, and potential lenders are well aware of that fact.
What is included in a typical credit report? First, it contains some basic personal information such as previous addresses, public records, date of birth and your social security number.
But even more important, it contains a history of your habits and patterns with respect to bill paying and the meeting of regular financial obligations. It shows if you pay your utility bills on time, or if you have missed payments on your credit cards. It also shows which accounts have been paid out, and how much you still owe on the ones that remain.
Your credit report does not make an official judgment concerning your credit-worthiness. It leaves that up to the lending institution. It is simply a collection of information that has been reported by various lenders. The lenders themselves will draw judgments from the report, deciding whether they are prepared to extend you further credit.
So why should you bother monitoring your credit report? As mentioned previously, your credit report is a collection of information submitted by lenders, and there is no guarantee that this information is correct or up to date. Keeping a close eye on it is the only way you can ensure it is accurate. When you find errors you can have them fixed.
Second, a credit report is usually a good reflection of the way you handle your finances. Many people use their credit report as a guide to clean up their act and do better in the future. It is also an indispensable tool for helping you decide to enter into a debt consolidation or bankruptcy arrangement.
How do you obtain your credit report? There are two popular methods. The first is to write and make a request to a credit agency such as Equifax or Experian. For a small fee, they will send it to you in the mail.
A more popular method these days is to obtain your report directly online. This is a simpler and faster solution. Once again, you will pay a small fee. Shop around though, as some services will provide you with a free trial.
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