Scan Your Credit Report to Answer these 3 Important Questions

On this blog, we often highlight the importance of checking your credit report at frequent intervals. One of the reasons why scrutinizing your report is essential is that it helps you identify cases of identity theft. Another reason is that by a careful perusal of your report, you can determine whether or not your creditors are accurately reporting your payment history to the credit bureaus. Finally, by going over your credit report, you can get an idea of your overall debt, and take steps to reduce it if necessary.

Has Your Identity Been Stolen?

Almost every day we hear of data breaches at big companies and scary stories about how criminals siphoned off thousands of dollars from unsuspecting consumers’ accounts by stealing their personal information. In such circumstances, it is quite natural for individuals to be worried about their own safety. One of the best ways to determine if you have been a victim of identity theft is to examine your credit report for accounts that are not yours. If you find any accounts that don’t belong to you, dispute them with the credit bureau and have them removed.

You should also scan the inquires section to ensure that the businesses that pulled your credit report are those you applied for credit with. Sometimes, criminals try to open accounts in consumers’ names; this leads to hard inquiries which show up on their credit report. However, you needn’t worry about any soft inquiries – these occur when companies check your report to send you pre-approved credit card offers. Unlike hard inquiries, soft inquiries have no effect on your credit score.

Are Your Creditors and Lenders Sending Accurate Information to the Bureaus?

If you are making all your credit card payments on time, but your issuer is not reporting it accurately, your credit score may be affected negatively. You should check each account’s payment history to ensure that it is correct. Your credit report will include payment details for the last 24 months for each account. Also, confirm your address and employer details – this will not influence your score, but it may affect your lender’s decision to grant you credit.

All open accounts should be reported as open, especially if they have a balance. An open account listed as closed can ding your score. Negative information, such as late payments, can be listed for up to seven years; bankruptcy can appear on your report for a maximum of ten. Examine your report to ensure that these delinquencies have been removed once the relevant credit reporting period is over. Finally, make sure that any debt discharged in bankruptcy is reported that way, and not as delinquent or unpaid.

What Is the Total Amount of Debt You Owe?

To answer this question, total up the balances of all the accounts on your report. Depending on the date of your report, it may not reflect the latest payments that you have made. Make allowances for these while calculating your total debt. Compare it to your monthly income to determine if it’s manageable, or if you should take steps to reduce it.

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