Why is it so important to keep tabs on your credit reports? Most people make it a point to check their bank accounts regularly. By going online or using the bank’s app to verify that their account balances are accurate. And that all the transactions are reflected properly. However, strangely, these very same people never bother to check their credit reports. Even though their credit reports have a direct bearing on their financial wellbeing. A brief look at why you should be actively monitoring your credit report:
To Get A Picture Of Your Financial Health
Keeping tabs on your credit reports. Since your credit score depends on the contents of your credit report, you should attempt to verify the information for its accuracy as poor credit has multiple ramifications, including but not limited to the determination of your creditworthiness by potential lenders that help them to decide whether you have the capability of repaying your debts and the rate of interest and fees that you can be charged on fresh lines of credit.
Your credit score is also used by insurance companies to decide your premium on insuring assets like cars, home, life, etc. And by utility companies to decide the amount of security deposit. Since your credit score is one of the prime determinants of your financial profile, the better your score, the more attractive rates of interest you will be offered on loans and credit cards, according to Personal Finance Analyst review.
To Rectify Inaccuracies That Damage Your Credit
Your credit report is an agglomeration of financial information drawn from multiple sources. There can be many mistakes like outdated information, incorrect balances, or errors in spelling that can hurt your credit score. You need to verify that the information in your credit report is a fair and correct representation of your finances because the information contained in the credit report is accessed by many people and organizations for evaluating your financial risk profile. Due to the vital importance of the information in credit reports, the Federal Fair Credit Reporting Act (FCRA) has empowered consumers to check that their information is complete, current, and accurate. Any consumer complaint on these grounds to the credit bureau must be investigated unless established to be frivolous.
To Help Prevent Identity Theft
Identity theft has reached a very alarming state in America; according to https://www.consumeraffairs.com, credit card fraud was the most common form of identity theft and in 2019, there were 167,000 cases credit card accounts being opened without the knowledge of their owners with stolen information. If consumers are not alert and do not take proper precautions to protect their confidential information, they will become complicit with the crime. While credit bureau alerts may not be sufficient to prevent fraud, your prompt reporting of the fact will usually help to prevent widespread damage.
The financial profile of a person represented by his credit report is of critical importance. Because it is based on this document, potential lenders, insurance companies, financial intermediaries, potential employers. And many more will evaluate the risk of establishing a relationship with him. It is thus vital to monitor the credit report and ensure that all the information is current and accurate.
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