February 24, 2009

Chances are you are like most consumers and hardly ever check your credit report even though you are entitled to one free one a year.  Is it forgetfulness or the mentality what has my credit report done for me lately?  Consumers often check their credit report before a few important times such as getting a new job, getting an auto loan, or the biggest, applying for a mortgage.  The rule to follow is to at least check it once per year.  If you want to really stay on top of your credit reports you should think about checking twice per year.

Why so often?  The biggest example would be if you are thinking about applying for new credit.  If you want have the best chance of getting approved and get the best possible interest rate, you will need a good credit score.  Your credit report makes up the info that goes into your credit score.  The hidden fact is that most credit reports have errors on them.  Bankrate.com states that 70% of consumer credit reports have errors.  That is a scary high number and you can guarantee that these are not in your favor.  They lower your credit score and most can be disputed.

Disputing these mistakes is going to take time.  It is not an overnight process.  The disputes take upwards of 30 to 45 days.  Also, this is no promise that they will be removed from your credit report.  If the credit bureau states they will remain on your credit report, you then have to contact your account.  This is going to take even more time.  The last thing you want is to be delaying your financing when you have your perfect home in mind.

Another reason to think about checking your credit report twice a year is identity theft.  If you don’t think this could happen to you, this is a huge mistake.  Fight Identity Theft.com puts on their homepage that 8.4 million individuals in the US were victims of identity theft last year.  This number grows every year.  The annual cost was $49.3 billion or $5,720 per victim.

Your credit report is going to be one of the best ways to know if you are potentially a target and or if you are a victim.  There will be addresses on your credit report that you have never heard of.  Or accounts that you know you didn’t open.  This is a clear sign someone has got a hold of your identity.

This alone is reason to check your credit report more than once per year.  You can do this yourself or pay for credit monitoring.  This is an easy way to not only gain access to your credit report more than once per year including your credit score, but they will watch your credit report 24/7.  They will alert you to any changes and you will always be on top of it.  This does cost money, but the peace of mind is often worth it.