Why You Need to Monitor Credit Reports and Scores
Credit reports and credit scores are one of the most important credentials in any financial transactions. It can also affect possible employment opportunities because future some employers take a look at applicants’ credit reports and scores especially for jobs that handle money and sensitive information. Be knowledgeable of your own credit reports.
The Fair Credit Reporting Act (FCRA) mandates that every consumer should be provided with a free credit report every twelve months from the three credit report bureaus-Experian, TansUnion and Equifax. Credit score on the other hand is not usually for free.
There are different formulas used in computing for credit scores. Aside from that, credit bureaus collect their data independently and do not show the same credit history Moreover, lending institutions, banks, insurance companies, and creditors use different formulas and rely on different credit bureaus. Do not be surprised if you notice that your credit score computation is different from one company to the other.
However, people can already access online their credit reports and credit scores from the three credit bureaus and even compare credit scores. There are companies offering this service. By enrolling in the package they offer, you can already monitor the changes happening in your credit reports from the three bureaus and check your credit score in a very convenient way.
You will receive notice of changes that occurred in your credit file. These could be credit inquiries, derogatory information, signs of credit fraud and newly opened accounts.
There is a need for you to monitor them to protect yourself against identity theft and inaccuracies in your record. Nowadays, the cases of identity theft are escalating because of rising unemployment rates and worse economic conditions the world is experiencing.
Identity theft happens when your personal information such as your credit card information, passwords, address, and social insurance number is used by other people for their financial personal gain but not yours. Look for the details in contained in your credit report that is not true and do the prescribed action to properly address this problem. You are the ones affected by your credit score and credit report so be vigilant.
If you have been ignoring your credit reports for the past, it is high time for you to be aware to avoid the costly consequences of identity theft. It is usually left undetected until people are turned down for a loan because of bad credit rating.
The saying an ounce of prevention is better than a pound of cure is applicable-staying updated can save you from financial trouble.