Is it important to check your credit report?

Consumers around the country rely on their credit to make large purchases like cars and homes. 

As such, it is important to earn credit and preserve it by being a reliable borrower and making timely payments. Many consumers rely on their credit to meet their financial goals. However, having bad credit can make it increasingly difficult to get a loan with affordable interest rates which can prevent you from making purchase and meeting certain life goals.

It is vital that you are aware of your credit score and familiar with your credit history before you attempt to take out a loan for a sizable purchase. Additionally, it can be incredibly helpful to keep track of your credit score and history so that you will always be updated on your financial standing. Learn more about why it is important to check your credit report and other financial information.

The Basics of Credit Score

Your credit score is a financial rating that is used to let lenders get a quick evaluation of your ability to repay loans and credit on time. A credit score is calculated using the information that is found on your credit reports. Typically, your credit score will give lenders an idea of your history of lending and repayment of loans. By doing so, these lenders can make an assessment about the financial risk you will pose to them. When you view your credit score, it will be displayed as a three-digit number that generally ranges between 300 and 850, where 300 is a very low credit score and 850 is an optimal score.

The Basics of Credit Reports

Credit scores are a simple rating of your credit’s status, but credit reports will provide you with more specific details about your personal credit history. It is essential to familiarize yourself with the information in your credit report in order to stay on top of your finances. By getting a credit report, you will be able to see any of your current or previous loans with banks and other lending institutions. Your report will also show you any credit checks you or a company has made in order to open up a line of credit. Some other information that will be included on your report are any credit cards in your name and any public records, such as your history of foreclosures or wage garnishments.

When is a credit report used?

A number of different lending companies and banking institutions will request credit reports from any potential borrower. They will use these credit reports to perform an evaluation on the amount of financial risk you pose, so they can determine whether you are suitable to be a borrower. Lenders will check how much credit you have built up and get a gauge of your financial status. Your credit report will also provide lenders with some insight on whether or not you make timely payments on your lines of credit and loans. The information in your credit report can influence whether or not you are approved for a loan and the interest rates offered by banks and other lending institutions.

Additionally, credit checks are used by landlords and property managers to evaluate prospective tenants who are applying to rent property. By requesting a credit report check, landlords can gauge whether or not an applicant will be a responsible tenant and pay their rent on time consistently. Landlords can review an applicant’s current owed amounts, repayment history and other public information such as any foreclosures or evictions on their records.

Performing a Credit Check for Yourself

Another important use of performing a credit report check is to review your financial history and protect your information and identity. For example, if you have any suspicions that your identity has been stolen, you can request a credit report in order to check for any fraudulent credit cards or other similar issues. When you check your credit report, notify the credit bureaus as soon as you notice any accounts you do not recognize that are potentially fraudulent. Credit reporting bureaus can assist you with correcting your credit report if you very that there are fraudulent accounts or that your identity has been stolen.

Furthermore, monitoring your credit reports and staying on top of your financial health can help you identify any potential issues. For example, credit reporting bureaus sometimes make mistakes and this can have an impact on your ability to take out loans or open lines of credit. It is vital that you report and correct any erroneous information as soon as you can identify it.

Your credit report will include a wide range of details about your credit history. This includes data about any current lines of credit or loans that you have open. Additionally, they can take a look at any loans that you have had in the past that have been paid off. Check your credit report as frequently as possible to ensure that your financial situation is managed effectively.

Credit Reports and the Impact on Employment Opportunities

Another important reason to frequently request to view your credit report is that your credit history can potentially impact your employment opportunities. Some employers will perform a credit check in addition to a background check when they are evaluating potential candidates. However, there may some specific rules that have been established for employers who are requesting credit checks for their application process.

While many employers will not require a credit report check, certain jobs that involve the handling of money or secured data may request one from all applicants. However, all employers will be required to be granted your permission before they can perform a credit report check. Job seekers are encouraged to view their credit report and have an understanding of their finances even before they want to apply to a position that requires a credit check. It is especially important to check all of the information on a credit report to ensure that it is accurate before employers see the mistakes.