Credit Report Monitoring Importance

Credit scores are necessary to know about your financial history, which is used by employers, insurance companies, lenders, utility providers and other business establishments. They review credit reports as part of their decision-making process. For this particular reason, it is important to do a credit report monitoring regularly each year to ensure that all the numbers in your credit report are correct.

The FACT Act of 2003

The Fair and Accurate Credit Transactions (FACT) Act of 2003 was passed in order to allow everyone the right to see their full credit report once in every twelve months. This is the reason why the government-approved website AnnualCreditReport was established wherein you can get free credit report from the three big credit reporting agencies. Every year, 25 million of free credit reports are claimed from credit reporting agencies. It might be a huge number but it does not even comprise half of the number of credit files that the credit bureaus have. Unfortunately, not everyone knows about this law thus they do not even bother with their own credit report monitoring.

Why Should You Monitor Your Credit Report?

Around 10% to 21% of the consumers have confirmed errors on their credit report. This means around 60 million of consumers have errors on their credit report every year. To make matters worse, only a handful of these individuals are aware of the errors on their credit report.

Credit report monitoring is very important because it allows you to find errors in your financial summary that can eventually lead to damaging your credit score. Remember that you need to maintain a good credit score if you want to get good interest rate from a lending company or if you want to extend your credit. You also cannot get good mortgage terms if your credit report has errors. Errors in your credit report are also indications of identity fraud. Look for frivolous financial statements and suspicious new accounts and contact the credit reporting bureau immediately to correct the errors. To see if the errors have been corrected, you can request for a new credit report and looks for the discrepancies after you have reported to the credit bureaus.

Credit report monitoring is an important step to ensure that your credit report is accurate and error-free. By constantly checking your credit report, you will also get a good score that you can use for your own benefits.