When you buy a car, the dealer checks your credit report. When you apply for a home loan, the bank checks your credit report. When you apply for a job, even your employer may check your credit report.
So why don't you check your credit report? Bankrate.com recently did a survey and found that about 35 percent of American adults never checked their credit report.
Why It's Important
Your credit report is the main indicator of your credit worthiness to lenders. A bad credit report could mean higher interest rates costing you thousands of dollars more. An error or fraud on your credit report could mean you're paying much more than you should.
Not checking your credit report also means somebody could be committing fraud and stealing your identity undetected. If you think you have a good record of paying your bills on time and paying down debt, but still get rejected for loans, there may be an error on your credit report giving you a bad financial reputation.
How to Check Your Credit Report
Because of the Fair Credit and Reporting Act, you are allowed one free credit report a year from each of the three main credit reporting companies, Experian, Equifax, and TransUnion. You can easily get a report from AnnualCreditReport.com.
Once you've received your report, check it thoroughly for errors. Is a debt you paid off years ago still listed as unpaid? Does the report list a credit card you never applied for? Is a loan amount listed as higher than it really is?
So, did you find any errors?
What to do in Case of an Error
If you do find an error, you can have it fixed by disputing the error with the creditor or the credit reporting agencies. If repeated attempts to fix errors on your report fail, you may have to consider legal action.
Regardless of whether or not you think there may be errors on your credit report, be sure to check it regularly. Don't let a mistake on your credit report cost you thousands of dollars. If you do need help rehabilitating your credit and credit report, consult with an experienced credit repair attorney.