How to Use Your Credit Report


When you check your credit report, do you know what you are looking for? Do you know just how important a healthy credit report is?

Thousands of people everyday checks their credit report without truly understanding what it is they are looking for or how important their credit report really is.

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Identity Theft Detection

One of the main things to be looking for when checking your credit report is for signs of identity theft. If you read through the report and see entries from banks or other financial institutions that you have never used or never even heard of, chances are you are a victim of identity theft.

How Your Retirement is affected

Over use of your credit means that you are spending funds on interest payments that could have been put away for your retirement savings or investments. Having a credit report will more than likely increase the amount of interest you have to pay on credit card and loan payments.

Used for More than Just Loans

Many people do not realize that your credit report is used for making decisions about you that goes beyond getting approved for a loan or line of credit. Many landlords now use your credit report to determine if you will pay your rent on time if you were to lease from them. Cell phone companies us your credit report before letting you sign up for a plan.

Employers are now using your credit report as part of their screen process when selecting applicants. Additionally, insurance companies will use your credit report to determine what your insurance rates will be.

Information About You

Make sure the information pertaining to you, such as employer and address, is correct. It does not directly affect your credit score, but lenders will use this information when deciding about your loan application.

If the information that you provided the bank does not match the information on your credit report, it could hinder your chances at being accepted.

Open Accounts

If you have accounts that are open, especially ones with a balance, make sure they are reported as open on the report.

If you have an account with a balance that is reported as closed, this will negatively affect your credit score. On the flip side however, closed accounts that are reported as open will no hurt your score.

Total Debt Owed

When looking at your credit report, total up all the debt you owe. Some reports will do this for you but not all of them will. This will let you know how much debt you owe and if you have too much debt. Comparing the total debt you have with your income will give you an idea of what you need to do to start getting rid of some of that debt. This makes for a perfect time to come up with a budget and plan to get out of debt.

You are entitled to one free credit report every year. Take advantage of it and start planning on removing your debt. Check to see if there are any debts that you are not aware of and protect yourself from identity theft. With today’s e commerce world, it’s easier than you think to become a victim.



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