Only One in Five People Checks Their Credit Reports

About 80% of consumers still aren’t checking their credit reports. According to a report from the Consumer Financial Protection Bureau only about 44 million of 200 million consumers checked their credit report in 2010 and 2011.

Ordering a free credit report is fairly simple through AnnualCreditReport.com, the site setup by the three major credit bureaus to fulfill the annual credit report requirements. Despite the availability of these free credit reports, only 16 million ordered through the dedicated site.

More people should check their credit reports, especially before applying for a credit card or major loan. There may be negative information, like a past due balance, on your credit report that can keep you from getting approved. If you wait for the lender to tell you what must be done to get your credit ready for a loan, then you’ve wasted precious time. Instead, you should proactively check your credit report for negative entries that will hurt your chances at getting approved.

Reviewing your credit report ahead of time will improve the odds that you’ll get approved the first time around. Not just that, cleaning up your credit prior to a loan application can help you get a good interest rate on the loan.

Another good reason to check your credit report is to ensure that your accounts are reported accurately and that no one’s been using your credit fraudulently. Typically, the sooner you catch identity theft, the easier it is to stop it and clear up the damage. But, without checking your credit report periodically, it could be years before you ever find out that your identity has been compromised. Worse, you might not find out until you’re trying to get approved for a major loan, like a mortgage.

Credit reports ordered through the credit bureaus range from about $9 to $30 depending on whether you purchase a single credit report or all three of your credit reports. Many consumers get their credit reports through a credit monitoring service, which can be $9 per month or more. The benefit of ordering through AnnualCreditReport.com is that it’s free every year. You don’t have to worry that you’re not getting the same credit report just because annualcreditreport.com is free. The information on these credit reports are the same as the information on any credit report you purchase.

The only downside to ordering your annual credit report is that you don’t get a credit score with it. Credit scores indicate whether you have good or bad credit and must be purchased separately. You do, however, get a free copy of your credit score if you’re turned down for credit or approved for less favorable terms because of your credit score. This free credit score will be mailed to you automatically.

When you’re looking for your annual credit report, it’s important to go directly to the website. There are dozens of imposter websites that claim to give you a free credit report, but actually sign you up for a free trial subscription to a credit monitoring service. You have to cancel the trial in a certain time frame, often less than a week, to avoid being charged for the subscription. If you get charged, then you’ve essentially paid for your credit report. You also don’t have yearly access to any of these faux free credit reports. Once you’ve used the offer, it won’t be available to you again.

Your credit report is used in far too many business decisions to ignore it. And that it’s free is even more reason to check your credit report. If you haven’t been in the habit of reviewing your credit report at least once annually, it’s not too late to start. Visit AnnualCreditReport.com to get your credit reports from each of the major credit bureaus. If you’ve already ordered yours for this year, you can purchase a credit report directly through the credit bureau.

Source: ConsumerFinance.gov