5 Essential Reasons to Check Your Credit Report

So why should you check your credit report? Errors in credit reports are becoming more commonplace all the time. The fact that the reporting system is fraught with mistakes does not stop lenders, mortgage companies, employers, insurance companies, and even cell phone companies from making decisions which impact YOUR life based on your credit report! Right or wrong, what's in that credit report can determine your future.

Here are 5 reasons why you may want to keep a close tab on what's in YOUR credit report:

1. Want to save thousands of dollars on your next mortgage?

Mortgage lenders use your credit score, among other things, to determine what interest rate they will charge you on your mortgage loan. For most people, their mortgage loan is their single biggest loan. It is also the one which stretches out over fifteen to thirty years. An extra point or few points on your mortgage interest rate can easily cost you thousands of dollars in extra interest over the life of the loan!

If someone's bad credit is on your credit report, you can be sure that it will cost you big time! It doesn't matter if that bad debt on your report is not yours. If you haven't checked your credit report and disputed that item BEFORE you applied for the mortgage loan, it still goes against you.

And what's worse, if you haven't checked your credit report, you may not even know why your mortgage interest rate is higher than you were hoping. The lender will not show you the credit report. If the lender denies your loan altogether, then they will send you a letter telling you which reporting agency had the info they based that denial on. Then it is up to you to go back to the credit agency to request your report.

By that time, the damage is done, and it could take you months to undo it. And it would have cost you money in extra interest on your mortgage loan, or gotten your loan denied.

2. Want to get the next job you apply for?

More and more employers are checking the credit reports of their applicants. They've found that people with better credit are more stable on the job because of less financial worries. In addition, any position which requires you to work with money may be denied you if your credit report shows you don't pay your bills on time. Never mind that you are as honest as the day is long. If you have bad credit, your employer will just hire someone else who may not be tempted to steal the money they need to pay their bills.

If you have not checked your credit report recently, you just might find yourself unable to get a job due to the errors on your report.

3. Identity theft -- you could be a victim and not even know about it!

You may think that identity theft only happens to people who get their credit cards, wallet, or purse stolen. In such cases, you find out right away that you are a victim. But there is another kind of identity theft, too. And the only way you can find out about it is if you check your credit report.

A thief could get your personal information, and then use it to get a job, new credit, and more. You wouldn't know about it because they don't drain your checking account or charge up your credit cards. But they will open all kinds of new credit, use that new credit, and then not pay the bills. Once they ruin your credit, they leave your identity behind and move on to stealing someone else's identity.

4. Insurance declined because of your credit report?

Yes, even insurance companies are checking your credit report now when you apply for an insurance policy. If there is bad stuff on there which doesn't belong to you, you could even get your insurance denied because of the credit agency's error.

5. What about your new car? Errors on your report can make the difference in whether you get a decent car or a piece of junk!

This is true. One time my husband and I went car shopping. Unknown to us, there was a lawsuit for like $30,000 from the state on my husband's credit report and a bankruptcy on mine. No telling how long they had been on there, because neither one of us had checked our credit reports.

We went to place after place looking for a car. Whenever we would sit down with the salesman, he would run our credit reports, and then say there was nothing he could do for us. His whole tone would change, and he would dismiss us abruptly. It was very embarrassing.

Even places who advertised that they work with people who have credit problems would rush us out of there.

And, naturally, none of them would say why they acted that way. Only that it was because of our credit.

We knew we paid some bills late, but we still paid them. "Could it really be this hard to qualify for a car loan," we thought. They made us feel like we were the scum of the earth.

We finally ended up at one of those last ditch places who would approve anyone, for a price. Their cars were junk. We picked out the nicest one we could find, got the loan, and joined the throngs of people paying for repairs on their lemon while they were still paying for their car. The price of the car was about triple or quadruple what it was worth.

The one good thing which came out of all this was that we found out why everyone was avoiding us. The car salesman at this place let it slip that there was a bankruptcy on my credit report. He did not say so in those words. I asked him some question about the loan, and he answered,

"It's because of the bankruptcy."

Bankruptcy? What bankruptcy? We had even signed on the loan application that we had never declared bankruptcy. Just as we had at every car dealership. But did that make ANY of them even question us about a bankruptcy? No, they just went by what was on the credit report, even though it was wrong.

At least we now knew what we needed to do to fix the problem. And that everyone was not avoiding us like the plague because of some late payments on our bills.

So the moral of the story, and this entire article, is:

Check your credit report! If you don't, you could conceivably end up like this from errors on your report:

-- With no job,
-- no house,
-- no car,
-- no insurance,
-- and someone else has your identity!

Don't let credit report errors ruin your life! Check yours now!