Most of us get our health checkups done regularly, but when was the last time you got your financial health checkup done? Most of the financial advisors will ask you to stay updated about your credit report and check it on a regular basis using free online tools. But have you ever considered why checking your credit report is important?It’s a good practice to check your credit report regularly to protect yourself against errors and frauds such as Identity theft. Read further to know more reasons why it is essential to check your credit report regularly without fail.
Why you should Regularly check your Credit ReportSnneha Lukaa September 29, 2019
1. Importance of Credit Report
It is a summary of your repayment history which is used by your lender to check your creditworthiness before giving a loan to you. There is a possibility that your name mentioned incorrectly or your address is wrong. If there are any such errors, your loan application will be rejected. Therefore, it is beneficial to check the credit report regularly for such errors or more importantly before you apply for a loan.
2. Protecting Yourself from Identity Theft
Many people across the world fall victim to identity theft every year. It is a fraudulent practice wherein your personal information is stolen to take loan or credit in your name. As per a Norton Report in 2015, there were 1042 million identities that were breached across the world in 2014. Keeping an eye on your credit it will help you spot any suspicious entries, and you will be able to deal with it more efficiently. You can make sure that no loan account which is not yours is added against your name and there is no unauthorized transaction in your statements.
3. Knowing the Impact of Any Missed Payments
There are credit card payments, and EMI payments, that need to be paid every month. Some months we can pay in full, and some months we get by only by paying the minimum amount. There are also months when we miss a payment and realize it after a few days. What we don’t understand is that these small things can have an impact on our credit score.Assessing your credit rating regularly is consequently an excellent method of staying updated about the effect of your financial actions. Say you missed even a credit card payment or an EMI payment. By Assessing your report, you would be shown precisely how much effect that had in your score.
4. To Improve Your Credit Score
Credit score is one of the most critical components of a credit report. It is a numerical representation of an individual’s credit worthiness. So, if you check your credit report and get to know that your credit score is low, you can work towards improving it.
A credit report is like a report card of your credit history. So, if someone has been misusing your credit accounts, it would clearly be visible in the report- And you can take timely corrective measures.