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6 Reasons Why You Should Keep Checking Your Credit Reports

By Janet Lacey
Published: Thursday, November 5th, 2009

Your credit report today is one of the most important documents in your life. Therefore, getting your credit report and checking it regularly should be done as a matter of habit. Since a person is entitled to three free credit reports an year, one each from each credit bureau, you can now check your credit report for free on a regular basis. Some of the main reasons why you should check your credit report every few months are: 

  1. Improve Your Credit Score: It has been found that almost 70% credit reports contain some or the other kind of error. If it is a negative error, then your credit score might be reported lower than what it actually should be. Checking your credit report regularly and getting errors corrected will ensure that your credit score does not go down because of faults committed by your creditors or credit agencies. 
  2. Manage Debt: Knowing where exactly you stand in the credit game will help you keep a track of your credit situation. In case you are trying to improve your credit rating for some reason or if you want to get out of a bad debt situation, then periodically looking at your credit report and noticing positive changes will be a great incentive for sticking to your debt management program. 
  3. Get Better Mortgage Terms: If you are planning to get a home loan, a mortgage or any other major loan, then even a slight difference in interest rates translates into thousands of dollars over the long haul. So getting the best interest rate and repayment terms is the best way to go. Checking your credit report before you apply for a mortgage, getting errors corrected and improving upon defaults will save you thousands of dollars on your mortgage repayment. 
  4. Prevent Identity Theft: In many cases, you may get to know that your identity has been stolen only after looking at your credit report. Identity thieves may have opened credit accounts or borrowed money in your name that you will get to know of in the accounts section of your credit report. Checking your credit report for errors in address, name or employment details and existence of accounts that you are unaware of will let you prevent and act against identity theft at the earliest. 
  5. Prevent High Credit Charges: In many cases, your current insurance and credit companies may increase the charges or the interest rates applicable on your credit cards or loans based upon negative information in your credit report. Checking and getting such negative items corrected will save you from paying extra where you are not supposed to. 
  6. Get Credit At Better Rates: The lower your credit score, the higher will be the fees, interest rates and other charges that you will be paying for any kind of finance that you apply for. By checking your credit report and maintaining the best credit score possible, you can save thousands of dollars in finance charges.

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