5 Reasons to Check Your Credit Report

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A woman checks her credit report online

If you’ve ever had a loan or a credit card, you also have a credit report—a document detailing how you use credit and pay your debts. But many people have no idea what’s on their credit report, either because they don’t know how to access it or they’re unsure how checking it can help them financially. If it’s been a while since you’ve reviewed your credit history, here are 5 reasons you should check your credit report.

1. Checking Your Credit Report is Free

Most financial experts recommend checking your credit report at least once per year. And the best part is that you can check your credit report for free. Many banks and credit card issuers provide free monthly credit score updates. There are also several places where you can access a free annual credit report, including annualcreditreport.com, the three credit bureaus, Credit Karma, and Nerd Wallet.

2. Checking for Accuracy

One of the best reasons to check your credit report is to verify that everything appears correct. Credit reports list your credit and payment history. And each entry can impact your overall credit score. For example, if your credit report lists a missed payment that you actually made, you can take steps to correct the information.

3. Stopping Identity Theft

A quick review of your credit report can help tell you if you’ve been a victim of fraud. If you see names, accounts, and social security numbers on your credit report that aren’t yours, it’s a good indication that something is wrong. This may negatively impact your credit score and cause problems when you apply for a loan. If you see something suspicious on your credit report, you can take steps to stop the fraud and prevent future identity theft.

4. Avoid Unpleasant Credit Surprises

There are few things in life you can ignore without suffering consequence. And your credit profile is no exception. By being vigilant and keeping up to date with your credit profile, you can take steps to improve your credit score. And you can avoid unpleasant surprises when you apply for a credit card or loan. Again, consider checking your credit score periodically and review your credit report every year. This simple practice can help you know when to take action to keep your credit profile in good shape.

A woman checks her credit report online

5. Understanding What Helps and Hurts Credit

Regularly checking your credit report can give you a better idea about what makes your credit score go up and down. If you see your credit score fall, you can check your credit report to see what actions may have caused it. Then, you can apply that lesson in your financial life, knowing what to avoid and what to do to improve your credit score.

Now that you know how to access your credit report and how it can help you, take charge of your credit and stay on top of your finances by checking your credit report regularly.