As a physician discovering the steps you need to take to improve your health, a financial checkup helps you understand how you can improve your finances.
5 Important Times to Review Your Credit Report
Checking your credit report is one way to decide what needs improvement. You know that once a year you get a physical examination from a doctor and a dental examination twice a year, but how often do you need to get a financial examination?
Now that we are entitled to free annual credit reports, it is a given that you need to check your credit report once a year.
But there are other triggers to check your credit report.
You are preparing for a loan-based purchase such as a home, car or boat
Your credit history is one of the primary factors used to approve a loan. You would be surprised at the items in the credit report that could reject your application. Even an unpaid 16 year sentence from four years ago can keep you from your dream home.
It’s a good idea to get a credit report six months before applying for a loan to clear up any discrepancies. This includes applications for private student loans and other student loan applications.
You were rejected for a credit card, loan, or other credit based service
If your credit was used in the decision, you are legally entitled to a free copy of your credit report. The creditor or lender should send this letter to you within 10 business days. They will tell you why you were rejected and include information explaining how you can get a free copy of the credit report used to make the decision.
When you receive a copy of your credit report, review it to make sure the decision was not made due to incorrect information. If you find an error in your credit report, dispute it with the credit bureaus and request that an updated copy of your credit report be sent to the lender.
You may be able to resubmit your application after your credit report has been corrected.
You stole your suspect’s identity
Unfortunately, identity theft is becoming more common. It can go unnoticed for months, even years, if you do not check your credit report regularly. You may not discover that your identity has been stolen until you have received a credit or credit application.
Phone calls and letters from billing agencies for accounts you haven’t opened might indicate that your identity has been terminated. Check your credit report to see if these accounts are reported to credit bureaus. If you find that your identity has been stolen, report it immediately to the credit reporting agency.
You make a plan to repair your loan or get out of debt or both
Since your credit report contains most, if not all, of your financial accounts, it’s a good place to start when you’re focused on financial acceptance. You can easily use the information in your credit report to create your plan for whether to repair your loan, get out of debt, or a combination of the two.
Once a year
Don’t wait until you need good credit to check your credit report. Check your credit report periodically to stay up-to-date on what your creditors are saying about you.