Credit reporting agencies say the best reason to check your credit report is to prevent identity theft. Checking your credit report can tell you if lenders have asked to see your credit report for loans for which you didn’t apply.
Importance of Good Credit
It’s important because your credit report is the standard by which banks measure your financial health. Your credit report will determine if you qualify for a loan and the interest rate you’ll pay. A credit report has an impact on a great many things of which you may not be aware.
Your credit report will influence the rates you pay for car, renter’s and homeowner’s insurance. A credit report is used to determine if you can rent the apartment you want, get a phone or credit card, and can even be used to approve or deny employment opportunities.
Credit Reporting Bureaus
Perhaps the most important reason to check your credit report is that there are three credit reporting bureaus and each agency can have widely differing information. They all collect information on you, but they don’t share that data between themselves.
It’s essential that you obtain a copy of your credit report from each one of the three agencies to ensure the information on each is accurate. However, your actual credit score isn’t part of your credit report. You’ll have to pay credit reporting agencies to see your credit score. The credit score that really matters is your FICO® score. It’s the one that lenders prefer and use to make decisions about you.
You should check your report for any accounts with which you’re unfamiliar. Lenders sometimes use a third-party to pull a credit report so the name isn’t the same as the lenders. If you recently applied for credit and don’t recognize the name, that may be why. If you find information on your credit report that’s inaccurate, you have the right to dispute it.
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