Why You Should Check Your Credit Reports Regularly

Whether you want to buy a house, take out a car loan, or get a credit card, a lender or creditor will check your credit. Inaccurate information in your credit reports can drag down your scores. Your application might be denied, or you might have to pay a higher interest rate than you should. Mistakes in credit reports are more common than you might think.

What Should You Look for When You Review Your Credit Reports?

You can go to annualcreditreport.com to request free copies of your reports from TransUnion, Experian, and Equifax. Go over your reports carefully and verify all the information, including your name, address, the list of accounts that are open, and your current balances. Look for anything that doesn’t seem right, such as an inaccurate balance, an account that’s listed twice, or an account that you closed but is listed as open.

It’s important to check all your credit reports because credit bureaus don’t necessarily have the same information. One report might contain an error, even if the others are correct.

How Can You Dispute an Error in Your Credit Report?

If you see something that doesn’t look right, contact the credit reporting company by phone, by mail, or online to dispute it. Specify which account you’re talking about and exactly what the issue is.

When two people have similar names, birthdates, or Social Security numbers, sometimes one person’s information winds up on the other person’s credit report. That’s called a mixed file.

If you think you know where inaccurate information came from, explain that when you dispute the error. For example, you and a family member might have the same name, and you might realize that your relative’s account is listed on your credit report.

You should also contact the credit card company or lender that furnished the information. It will investigate, correct an error if it finds one, and provide updated information to the credit bureaus.

What Should You Do about Identity Theft?

An account that you don’t recognize might not be an error. Your personal information might have been stolen and used to open a fraudulent account. If you think you’re a victim of identity theft, you can file a report.

Contact one of the credit bureaus and request a fraud alert. That will require creditors to take steps to verify your identity, such as contacting you by phone, before raising the credit limit on an existing account or opening a new account in your name. When you contact one credit bureau and request a fraud alert, it will notify the other bureaus.

An initial fraud alert will remain in effect for one year. You will have the option to get an extended alert, which will last for seven years.

Another way to protect yourself in the future is to request a security freeze, which is also known as a credit freeze. If your credit is frozen and someone applies for credit in your name, the lender or creditor won’t be able to access your credit report. If you want to freeze your credit reports with all the bureaus, you’ll have to contact each bureau individually.

Why Should You Check Your Credit Before You Apply for a Mortgage?

If you’re thinking about buying a house, you’ll probably need to take out a loan. A lender will check your credit when it evaluates your application. If your report contains inaccurate information, your mortgage application might be denied, or you might have to delay a home purchase while things get sorted out.

The sooner you spot a problem, the sooner you’ll be able to address it. That’s why it’s a good idea to request copies of your credit reports and check them for errors or evidence of identity theft before you apply for a mortgage or seek preapproval.

Where Can You Learn More about Buying a House?

Having strong credit can help you qualify for a mortgage with a competitive interest rate, but you might not know what kind of loan you should choose or what term would work best for you. You can learn about mortgages and a lot more in the First-Time Homebuyer Masterclass. It will walk you through each step in the homebuying process, explain your options, and help you make decisions that are right for you. Enroll now.

Please share this blog on social media and/or send it to someone you know who is thinking about buying a house this year.