Credit Score
Most Americans don’t pay attention to their credit report – until they apply for a car loan or mortgage. Credit reports were, at one time, mysterious and complex. Errors were common, and could take months to fix. This is no longer the case. Under the Fair and Accurate Transaction Act (FACT), every consumer is entitled to a copy of their credit report from each credit bureau every year. The law made it easier for the average consumer to obtain and understand their credit report. Take advantage of this law, and check your credit every year
Mistakes Don’t Fix Themselves
Many consumers find out about mistakes on their credit report during an important financial transaction. Stopping the process to repair the mistake could mean an increased interest rate or term. During a mortgage or car loan application is not the time to find out that delinquencies appear on your account that are not yours. Understand what is on your credit report before you begin the process so that there are no surprises. Checking your credit regularly is an important financial checkup that everyone should perform
Mitigate Identify Theft Losses
Identify theft is becoming increasingly common. The effects of identity theft can be devastating, and can take years to recover from. Credit repair companies can help you put the pieces together if you find that you have been victimized. By this time, the damage is already done. One thing is certain, the sooner you are aware of abnormalities, the sooner you can take protective measures to stop the bleeding. An important first step is to place a freeze on your credit report as soon as a problem is detected.
Improve Your Credit Score
Simply understanding your credit score will help you improve it. Do you know what your credit utilization is? Do you know how long your oldest account has been open? The answer to these and other questions helps to determine your credit worthiness, and will help you improve upon your score. Potential credit grantors will not want to see high credit utilization ratios for example as this makes you appear over extended. Pay down some of your debt in order to improve your overall score.
When it comes to your credit report, ignorance is not bliss. Don’t wait until you need a credit repair company. Knowing and understanding your credit report is an important part of becoming financially responsible.