Appreciating Credit Reports: 3 Ways They Make Life Easier

Credit reports can sometimes be overwhelming and overlooked; especially when keeping track of the three main bureaus that offer credit reports. Understanding and appreciating credit reports can be beneficial, because many times, what you don’t know may hurt you.

Here are 3 benefits to keeping track of your credit:

1) They offer you a clear indicator of your financial health.
It’s easy to keep track of a huge chunk of your financial activity using your credit report. Here, you can find all your loans and credit cards listed on one document. You can also see the status and payment history for each account. Notable public records such as bankruptcy filings may also be found here.

With all of this information on one piece of paper it might also be easier for you to spot any inaccuracies or errors as they’re all on one record. Do keep in mind that your credit report does not hold all financial information as found in your bank statements. Be sure to monitor both.

Credit reports also offer some insight if you’ve been rejected for a loan or a credit card application. After all, if your credit scores are low, it may be harder to get approval for a loan. But if your credit score is high enough, you can consider using it as proof to back you up when making an appeal.

2) You’ll know who checks your credit history.
Businesses and organizations can check your credit history for various reasons. Some do “hard” inquiries (credit checks that can affect your credit scores) to see how credit-worthy you are when you apply for a loan, while others want to see your standing as part of a background check. In some cases, businesses can do “soft” (credit checks that do not affect your credit score) checks on your credit for pre-qualification to promotional campaigns.

Having too many “hard” inquiries performed on your file in a short span of time can be a red flag to lenders. You might come off as desperate and it could diminish your credit score. If the companies doing “hard” checks on you don’t seem familiar, this could be an early sign that someone is trying to create accounts under your name in a case of identity theft.

3) Detect identity theft.
Lenders may report all the activity under your name to the 3 main credit bureaus. Since all of these are on your credit report, it can help you spot accounts made under your name without permission. 

If you discover any such accounts or inaccuracies on your credit report, it might be a sign of identity theft. Consider checking your credit report regularly to spot these.

These are just three ways to keep track of your credit report to make life a little easier.