When did you last check your credit report?

One of the most important aspects of your finances is your credit. Your credit score is an interpretation of the information in your credit report. Keeping on top of your credit report is vital if you want a good credit score.

With so much riding on your credit, it makes sense to check your credit report monthly so that you can keep tabs on your situation.

                                    

Are You an Identity Fraud Victim?

You probably understand the importance of checking your credit report to see where you stand before you apply for credit. After all, you don’t want an unpleasant surprise when you apply for a mortgage! However, even if you don’t plan to apply for a loan in the near future, it still makes sense to check your credit report.

By keeping tabs on your report, you can quickly identify cases of identity fraud. Your credit report can provide you with a big identity theft red flag: “Has a new creditor appeared on your report for an account you know you didn’t open?”

When you see a new loan, in your name, might be an indication that your identity has been stolen. With so much publicity surrounding data security breaches at major retailers , it’s especially important for you to check your credit report to see where you stand.

You can spread out your reports so that you get one from each bureau every four months. 

The faster you catch this identity fraud, the faster you can fix the problem and restore your good financial reputation.

What About Mistakes?

Sometimes, it’s not a matter of fraud when information is wrong on your report.Checking your credit report is important not just to identify possible identity theft, but also to make sure that the information in your credit report is accurate. Companies use your credit report to determine credit worthiness for a loan and whether you will be eligible for purchasing insurance in some states.

And that’s not all, some employers also review credit reports when making hiring decisions. Negative mistakes on your credit report can cause you to appear less responsible than you are, and could cost you the job.

So, credit report mistakes can result in higher interest rates on loans, and in higher insurance premiums, as well as affect your ability to get a better-paying job in some cases. Over a lifetime, mistakes on your credit report can cost you thousands of dollars — and they might even cost you a job.

Are You on the Hook for Someone Else’s Debt?

Another good reason to check your credit report regularly, is when you are on the hook for someone else’s debt. If you have joint or cosigned debts, you should check your report frequently.

Many married couples apply for debt jointly. This means that your credit accounts are in both your names. It’s important to check your credit report if your spouse is in charge of making payments, just to be sure that it’s actually happening, since your credit rating is impacted by the status of your joint your loan.

It becomes especially important to keep up with payment history if you are divorced. Your shared debts are usually divided. This means your ex might be in charge of making payments on your joint credit account. If he or she doesn’t meet the obligation, it reflects on you. Regardless of your divorce decree, you are on that bill.  Creditors don’t care about your divorce.

Whenever possible, try to get your name off the debt when the divorce goes through. If this isn’t an option, check your credit report regularly to keep tabs on the situation.

This is also a requirement if you have cosigned on someone else’s loan. When you cosign, you accept responsibility — even though the other person is making payments. Check your credit report to see whether or not that debt is being paid on time. If it’s not, you will need to take steps to prevent it from destroying your credit. This isn’t just about divorce. This applies to accounts with children, parents, friends, or anyone you’ve entered a loan with, or cosigned for.

Your credit report can provide you with advance warning that something isn’t right with your financial image. 
Check it regularly, fixing mistakes, identifying fraud, and intervening when it looks like your joint or cosigned debt isn’t being paid as agreed.

To learn more about identity theft, visit www.cibilconsultants.com
Source: Secondary