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Comment on this articleDo you understand your credit report?
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One of the most important tools at your disposal when you are dealing with credit, is your credit report. This is what will tell you how good your credit is, the knocks against your credit, how much you owe and what creditors have said about your payment practices.
Your credit report is the tool you need to repair your credit, and without it, you will have no idea what you have to fix.
For example, you may think that you have perfect credit and assume you don’t need to see your credit report. However, with 75 percent of all credit reports having an error on them, you may not know that you have poor credit because you did not look at the credit report. As a result, you go to get a loan, but are rejected. Assuming it was the creditor, you go to get it from somewhere else. After three or four rejections, you begin to think there may be a problem with your credit. You pay your bills on time, you owe very little, but you have poor credit, why? To answer the question, you need to look at your credit report. Sadly, by this time you have lowered your credit even more by applying for credit at four places, and being rejected at all of them. Not only does applying for credit damage your credit rating, but it also makes it look like you are a compulsive borrower.
You could have saved yourself a headache by just looking at your credit report and finding the error before you ever applied for a loan.
Under law in the United States, you are entitled to one free credit report per year. You can get your credit report from any number of agencies, with the top two being Equifax and TransUnion. These two credit agencies will be able to provide you with your free credit report, which will allow you to determine whether or not you have credit problems, and if you do, what you need to do to fix them.
In regards to how many times a year you should check your credit rating, it depends. At least once a year is good, but with the problems of identity theft, a more frequent basis may be a better idea. Checking your credit report every six months is a better option. While you can damage your credit by applying for credit, you cannot damage it at all by getting your credit report.
If you are applying for any loans, including a mortgage, credit card or auto loan, then you should make sure that you check your credit report before you do so. This saves time as you can show it to the creditor, so they can pre-approve you. Also, knowing your credit rating will help you determine what you will be paying in terms of interest rates.
Knowledge is power, and knowing what you have for a credit rating and what problems may arise on it, will keep you from damaging your credit more than you need to.
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