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Articles » Free Annual Credit Report | | Why Is Checking One's Credit Report On A Regular Basis So Important? |
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Your credit report contains information about you that will determine whether or not you can get a mortgage on a home, buy a new automobile, acquire a major credit card, or even get a job. These decisions are made by checking your credit report and your FICO score , which is the rating system used by Experian, Equifax, and TransUnion.
The information on your credit report changes as your credit behavior changes. When you make a payment late, it shows up on your report. When you apply for a line of credit , it shows up on your credit report. If someone inquires about your credit history or asks for your FICO score, it is recorded. Bankruptcies, tax liens, foreclosures, utility bills, legal judgments, and open lines of credit are all recorded on your credit report. Some of these are reported monthly, and others remain on your report for seven to ten years. In other words, this one document about you is the most important factor in your financial success.
Identity theft can also affect your credit report. This is probably the most important reason why you should monitor your credit report on a regular basis. Your payments and spending habits are things that are under your control and can be changed, but if someone steals your social security number and opens up credit accounts with it, you won’t know about it unless you see it on your credit report. These items can be disputed and removed, so you want to keep a close eye on them.
Another good reason to monitor your credit report is to make sure items are removed when they expire. Anything seven years old or older should automatically come off. The only exceptions to this are bankruptcies, which stay for ten years, criminal convictions (permanent), and unpaid tax liens (also permanent). Regular examination of your credit report and a written request to the credit bureau will ensure that these are removed in a timely manner. You can also add information to your credit report that is not present, such as positive payment histories and paid off or closed accounts. If you want your FICO Score to be accurate, it is imperative that you stay vigilant.
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