Do you know what’s on your credit report?
Three credit reporting bureaus — Equifax, Experian, and TransUnion — are storing detailed information about your spending and borrowing history right now. This information is used by all kinds of companies to make decisions about how much to charge you for everything from personal loans to car insurance.
If you aren’t keeping tabs on your credit report, you have no way of knowing what’s on it. But far too many people aren’t giving their credit report the attention it deserves.
The major mistake you’re probably making
Checking your credit report on a regular basis is both simple and important.
“Checking your credit report is an essential part of maintaining a healthy financial life,” advised Natasha Rachel Smith, a personal finance expert at TopCashback. “You can save thousands of dollars in interest over your lifetime by being proactive about your credit.”
Unfortunately, 27% of Americans ages 18 to 37 responding to a recent CreditCards.com survey said they’d never checked their credit reports or scores. Among those younger than 30, that number was 36%.
Though older Americans are more likely to have checked their score at some point, half of the survey respondents said they hadn’t checked their score in the past six months.
This is a big problem because your credit report could have errors or even indicators that your identity has been stolen. If you don’t catch those problems early, it could cost you.
Why should you check your credit report?
Regularly checking your credit report is important for a few big reasons.
The information on your credit report is used to determine your credit score, which affects your life in major ways. It’s used to decide if you’ll be approved for loans and what interest rate you’ll be charged.
In most states, insurers can use your credit history to set rates for car insurance. Landlords can check your credit when deciding whether to rent to you. Some employers even check your credit before hiring you.
“People with lower credit scores end up paying as much as 30% more over their lifetime for goods,” warned Samuel Rad, a certified financial planner and UCLA instructor. “Checking your credit report can help you keep a healthy high score.”
Mistakes on credit reports are common, warned Rad, and data from the Consumer Financial Protection Bureau (CFPB) confirms this.
Credit report errors are the third most common cause of consumer complaints made to the CFPB. Seventeen percent of all consumer complaints relate to credit reporting problems, and most of those complaints deal with credit errors.
Checking your report not only helps you spot mistakes, but it can also be a good way to notice fraud.
“Unless you take a close look at your credit report, you may not notice if someone else has been using your personal information, such as your Social Security number, to apply for credit,” Smith warned. “It’s crucial if you notice any unfamiliar accounts to call the issuer and confirm your suspicions. If theft is confirmed, file an identity theft report.”
You can contact local law enforcement and contact the credit bureaus to report fraud.
Watching for fraud is especially important in light of major data breaches, including the 2017 Equifax attack that allowed hackers to access personal information belonging to 143 million Americans.
If your data falls into the wrong hands, this makes you more vulnerable to identity theft. An estimated 15.4 million consumers were victimized by identity fraud in 2016, according to a study released by Javelin Strategy & Research.
By regularly checking your credit report for unauthorized accounts in your name or unexpected judgments against you, you can find out if you’ve been victimized by fraud and take action.
How often should you check your credit report?
Checking your credit report should become a routine habit. Many financial experts recommend checking your report every four months.
In addition to checking your credit report — which shows all the accounts you have open, your payment history, your debt balances, and any judgments against you — regularly checking your credit score is also a wise habit.
Your credit score is the number you’re assigned based on an analysis of the data in your report. It’s ultimately used by lenders to make decisions about whether to extend you credit and on what terms.
Tracking your score over time can also help you see if you’re making the right financial moves. As you develop a history of on-time payments and pay down debt balances, your score should gradually rise.
How can you check your credit report?
You can visit AnnualCreditReport.com to obtain one free copy of your credit report every year from each of the three credit bureaus. If you want to keep regular tabs on your credit, pull one of these credit reports every four months, spaced evenly throughout the year.
You’ll need to input some basic identifying information, including your name, your current and previous address, and your Social Security number. You’ll also be asked to answer some questions to verify your identity.
If you want to check your report more often, you can purchase copies directly from Experian, TransUnion, and Equifax. You can also sign up for a free account at Credit Karma to see your credit score, obtain a copy of your credit report, and check details on open accounts and payment history.
Checking your credit report takes only a few minutes, so it’s a simple habit to start. And if something does go wrong, you won’t find yourself being denied a credit card or personal loan because of a simple credit report mistake.
Interested in a personal loan?
Here are the top personal loan lenders of 2018!| Lender | APR Range | Loan Amount | |
|---|---|---|---|
1 Includes AutoPay discount. Important Disclosures for SoFi. SoFi Disclosures
2 Includes AutoPay discount. Important Disclosures for Payoff. Payoff Disclosures
3 Important Disclosures for FreedomPlus. FreedomPlus Disclosures
4 Important Disclosures for Citizens Bank. Citizens Bank Disclosures
5 Important Disclosures for LendingPoint. LendingPoint Disclosures
6 Important Disclosures for LendingClub. LendingClub DisclosuresAll loans made by WebBank, Member FDIC. Your actual rate depends upon credit score, loan amount, loan term, and credit usage & history. The APR ranges from 6.16% to 35.89%. For example, you could receive a loan of $6,000 with an interest rate of 7.99% and a 5.00% origination fee of $300 for an APR of 11.51%. In this example, you will receive $5,700 and will make 36 monthly payments of $187.99. The total amount repayable will be $6,767.64. Your APR will be determined based on your credit at time of application. The origination fee ranges from 1% to 6% and the average origination fee is 5.49% as of Q1 2017. There is no down payment and there is never a prepayment penalty. Closing of your loan is contingent upon your agreement of all the required agreements and disclosures on the www.lendingclub.com website. All loans via LendingClub have a minimum repayment term of 36 months or longer. 7 Important Disclosures for Earnest. Earnest Disclosures
8 Important Disclosures for Avant. Avant Disclosures* The actual rate and loan amount that a customer qualifies for may vary based on credit determination and other factors. Funds are generally deposited via ACH for delivery next business day if approved by 4:30pm CT Monday-Friday. Avant branded credit products are issued by WebBank, member FDIC. ** Example: A $5,700 loan with an administration fee of 4.75% and an amount financed of $5,429.25, repayable in 36 monthly installments, would have an APR of 29.95% and monthly payments of $230.33 * Important Disclosures for Upgrade Bank. Upgrade Bank Disclosures* Your loan terms are not guaranteed and are subject to our verification and review process. You may be asked to provide additional documents to enable us to verify your income and your identity. This rate includes an Autopay APR reduction of 0.5%. By enrolling in Autopay your payments will be automatically deducted from you bank account. Selecting Autopay is optional. Annual Percentage Rate is inclusive of a loan origination fee, which is deducted from the loan proceeds. Late payments or subsequent charges and fees may increase the cost of your fixed rate loan. All loans made by WebBank, member FDIC. Please refer to Upgrade’s Terms of Use and Borrower Agreement for all terms, conditions and requirements. ** Accept your loan offer and your funds will be sent to your bank via ACH within one (1) business day of clearing necessary verifications. Availability of the funds is dependent on how quickly your bank processes this transaction. From the time of approval, funds should be available within four (4) business days. |
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 | 7.73% – 29.99% | $1,000 - $50,000 | Visit Upstart |
 | 6.26% – 14.87%1 | $5,000 - $100,000 | Visit SoFi |
 | 6.99% – 35.97%* | $1,000 - $50,000 | Visit Upgrade |
 | 8.00% – 25.00%2 | $5,000 - $35,000 | Visit Payoff |
 | 4.99% – 29.99%3 | $10,000 - $35,000 | Visit FreedomPlus |
 | 5.99% – 18.99%4 | $5,000 - $50,000 | Visit Citizens |
 | 15.49% – 34.49%5 | $2,000 - $25,000 | Visit LendingPoint |
 | 6.16% – 35.89%6 | $1,000 - $40,000 | Visit LendingClub |
 | 6.99% – 18.24%7 | $5,000 - $75,000 | Visit Earnest |
 | 9.95% – 35.99%8 | $2,000 - $35,000 | Visit Avant |