Watching Your Credit by Ordering Your Credit Reports

Did you know your spending habits are being monitored? This may be common news to you, however, do you know exactly what information is being compiled about your finances? Your credit report is a compilation of all your debts, spending habits, savings, payments and all other financial transactions you have made in the last seven to ten years. Unless you take some action to obtain these necessary credit reports, you have no idea if they are accurate or not. The more “bad” or negative credit on your report, the higher the interest you will have to pay the next time you take out a loan.

Request Your Credit Report

Requesting your credit reports do one of two things - first off, it keeps you in the know of what is being reported about you and your financial habits. If you have missed previous monthly payments, or creditors and financial lenders are hounding you for their funds, you will have all this reported at specific credit bureaus, such as Equifax, TransUnion or Experian. You will then be more aware of your financial habits, and hopefully take steps to improve your report for lower interest payments on future purchases using credit.

The second reason to request your reports is to check for any inaccuracies. People make mistakes all the time, and with the millions of transactions going on daily, a lot of information is bound to be report wrong. This can mess up your credit report, reporting bills past due when in fact you paid them on time, recording loans the wrong way, and not removing bad debt items after they legally expire (usually after seven years.)

When I acquired my first credit score, I was amazed at how much detail was on that report. The day you sign-up for your first credit card or for your first loan, your credit history is recorded on virtually every action you take from then on. Again, many of you may already know this, but for the individuals that are new to this information, this is the time to research further to really understand how credit bureaus report information about you.

When Is The Right Time To Obtain These Reports?

Depending on whom you talk to, whether it’s your bank or any other financial institution you’re currently dealing with, most may say that you should check your personal history at least once a year. Even if you make your monthly payments on time, or pay off your debt in full, you would be surprised at how many times there can be a mistake or error placed on your report. You wouldn’t even know it until you go to qualify for a personal loan, or possibly your first mortgage, and are shocked at having to pay either a higher interest rate or being declined.

Imagine when you decide to visit your bank as a first-time homeowner. You’re ready to sit down and negotiate a really good interest rate, all smiles and nerves. Your mortgage agent, checking your credit report, suddenly turns cold and professional and explains that you have credit issues. Not only would this be a shock to you, but also it would probably make you feel really embarrassed finding this out through your financial institution.

You can avoid that embarrassment by ordering your reports regularly and scanning the information for any questionable transactions and inaccuracies. If you find a few, you can write letters to the appropriate credit bureau requesting they prove that the information is correct. If the bureau can’t prove it with the necessary financial documents, they must remove the offending item. A reputable credit repair service can help you with this as well, if you don’t have the time nor desire to learn the proper legal procedures and formats to request a change on your report. After repairing the damage, you can walk back to the bank with confidence, knowing you will have better negotiation leverage to ask for a lower rate on your mortgage!

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