The Importance of Reviewing Your Credit Report Regularly

In these trying times, with unemployment at a 30-year high and people losing homes, assets, and savings, it can be difficult to muster the energy to give your credit score a second thought. After all, with bill collectors calling daily, you have a pretty good idea that your rating is in the toilet. So why should you bother to check your score? It’s not like you need to feel worse about your situation. On the other hand, knowing what your credit score is could give you the motivation you need to make some of the tough choices you’ve been putting off. If selling your house isn’t an option and you’re getting deeper and deeper in debt, then maybe it’s time to declare bankruptcy and start at square one. Or perhaps your credit isn’t quite as bad as you think and you have more options available. Whatever the case, you won’t know until you check your credit report.

Regardless of whether you’re managing to stay afloat through the recession or if you’re on the verge of sinking, there are plenty of reasons to monitor your credit report. First and foremost, you can often get it done for free on websites that provide credit reporting services (such as www.annualcreditreport.com). You may also find services that offer free reports to those who sign up for other credit reporting services, but if you’re low on cash, you’ll probably want to go for the one that’s actually free (no strings attached).

But why is it important to get such a report, and how often should you check? Isn’t checking your credit score bad? Well, in truth, it can be a red flag if too many people are checking your credit because it implies that you may be trying to open several lines of credit. For this reason, you should request a report on a yearly basis (think about doing it around tax time for an easy reminder). As for why you should check up on yourself, the benefits are many.

For one thing, you are likely trying to pay off debt (most of us are). You want to make sure that any black marks on your credit report are removed (you’d be surprised how long they can linger if your creditors “forget” to remove them). If credit that you paid off is still hanging around on your report you need to contact the creditor and have it removed it as soon as possible so that it doesn’t negatively impact your credit score. You also need to make sure that your report is accurate and free of fraud. You’d be surprised how many people receive their report only to realize that a portion of the debt has been wrongly attributed to them (or that they have been the victim of identity theft and someone else is racking up credit card debt in their name). While this situation can be scary, it’s best dealt with before it gets out of hand.

In short, it pays to get a regular copy of your credit report. You could find that you’re a lot better off than you thought (wouldn’t that be nice?) or that there are steps you can take to improve your credit. Of course, you could also discover that your financial situation is beyond salvage, leading you to take the steps necessary to start fresh. Whatever the state of your credit, it is your responsibility to maintain it. By staying on top of your finances, you have a much better chance of keeping them in order and coming out on top.

Sarah Danielson writes for No Credit Check where you can find anything from a prepaid satellite TV to a car rental no credit check.