It is not enough to pay your bills on time & retain a debt-to-income ratio that is favourable to keep the condition of your credit in good standing. You should also make it a habit to monitor your credit reports regularly to check for any problems, such as erroneous information or fraudulent activity, that might bring your credit score down.

In the following article, find out why should you check your credit report and why it is so important to check your credit report regularly, as well as information on how to do so without incurring any costs.

The Importance of Checking One's Credit Report

Good credit hygiene includes routinely reviewing your credit report. If you check your credit report frequently, you can:

Be Vigilant Against Scam

Why should you check your credit report once a year? If you check your credit report often, you can catch identity theft or fraud in its early stages. A credit report can alert you to potential fraud if it reveals an unusual address, credit accounts for which you didn't apply, or activity on credit cards you haven't used in a while. Similar to a checkup at the doctor's office, early detection of a problem might prevent it from worsening.

Find and Talk About Mistakes

Mistakes do not always point to fraud. A lender's wrongly reporting a payment as late can have a devastating effect on your credit score. You can ask your lender or the credit bureau where the late payment appeared to remove the mark if you believe it was recorded incorrectly.

A lender reporting the wrong Social Security number (SSN) or an address with transposed numbers is one example of a possible typographical error. Incorrect personal information, such as a Social Security number, can be contested and deleted upon request. Your Social Security number will never be included in your Experian credit report, protecting you from identity theft.

Advantages of Doing Frequent Credit Report Checks

Among the many advantages of reviewing your credit report frequently are the following:

1. Be aware of how your choices affect your credit rating

Regularly checking your credit score is a great way to keep tabs on your financial behaviour. Why should you check your credit report annually? In this manner, you can observe the effects of your activities on your credit rating. You may receive better terms on mortgages, car loans, personal loans, and more if you know what factors can lower your credit score.

2. Verify Accuracy of Data:

An accurate entry on your credit report might positively affect your score. If that's the case, you must fix the issue immediately by contacting the credit reporting agency and your bank. If you have your most recent credit score, you may shop for the best interest rates and terms on credit cards and loans. You may obtain personalized pre-approved credit card offers from Paisabazaar partners after checking your credit score on the site. Your ability to borrow money and the terms under which you do so improve with a higher credit score. In a nutshell, it strengthens your hand in loan negotiations.

How Often Should I Review My Credit Report?

According to Rod Griffin, Experian's senior director of public education and advocacy, why should you check your credit report yearly? you should check your credit report annually at the very least. You should also review your credit report at the following times:

• Three months before applying for a large loan, such as one to buy a home, car, or boat.
• Theft of your wallet, credit cards, or personal information (such as your Social Security number)
• After making a substantial adjustment, such as starting a mortgage or paying off college debts
• If you see a sudden change in your credit score and you can't figure out why

If the status quo persists, annual checks are recommended. Griffin recommends choosing a day that will stand out in your mind, such as your birthday, St. Patrick's Day, Labor Day, or any other holiday. Doing a credit check as a regular part of your routine is essential, regardless of the season.

You should review your credit record at all three main bureaus (Experian, TransUnion and Equifax). Checking all three of your credit reports is a good idea whenever there is a sudden change to one.

Conclusion

Good credit hygiene includes reviewing your report annually. Why should you check your credit report on a regular basis? It can give you confidence that your credit is in good shape and that the data you have is correct. If you plan on making a large purchase using credit, if you've been the victim of identity theft, or if you suspect you may be at risk, it is in your best interest to check more frequently.