Using Your Credit Report: Why You Should Check The Information

Posted by Nick Niesen on October 29th, 2010

Banks, credit card companies, mortgage lenders and just about every financial institution uses credit scoring to determine your suitability for loans or finance. Unfortunately, many people don?t even think about using your credit report to check your score before applying for a loan or credit card, and you could be in for a nasty shock! Being turned down for credit can often come as a surprise for unsuspecting consumers, so using your credit report in advance is essential to check that all the facts are correct and relevant. It is important that you obtain your credit report from a reputable credit scoring company, as there are an increasing number of unscrupulous websites claiming to hold this information.

Using your credit report to check the details.

The first thing to do when you receive your credit report is to check every entry. This includes your names (including any previous names before marriage), addresses ? past and present ? and any other personal information. You should then have a look at the current and past credit institutions that you have any arrangements with and make sure that these are legitimate entries. Using your credit report information, you should be able to see the status of your payments to mortgage lenders, credit card companies, store cards, auto finance and any other financial arrangements that you have obtained credit for. Again, check each of these carefully for errors or incorrect information.

Using your credit report to check your score.

Banks and other lenders, including credit card companies, will use your credit score to decide if you qualify for their accounts. Using your credit report to check your score can help you to decide which financial products you would be able to apply for, and avoid any embarrassment by being rejected. Applying for a mortgage can be a particularly stressful task and using your credit report beforehand will help you choose the right company and home loan products. Similarly, there are numerous credit cards available and these offers can vary widely depending on your credit score.

Using your credit report to improve your score.

Forewarned is forearmed, so using your credit report to check all of your regular payments to loans and credit cards can help you rebuilt your score. You may not have realised that you?re a month behind with some of your payments, or that you have a debt that you?ve forgotten about. If you?ve moved home and failed to inform one or more credit companies, there could be outstanding debts on your credit report that you?re no longer receiving mail for. You can get your score improved, in time, by catching up with any missed payments or outstanding debt, by using your credit report to keep yourself up to date.

Credit scoring companies do get things wrong, and if using your credit report shows up any errors or incorrect information, it is vital that you contact them as soon as possible.