Your credit report is a detailed record of your credit history, including information about your borrowing and repayment habits. And it’s this report that banks and other types of lenders use to determine your creditworthiness as a borrower.
For this reason, it’s important to regularly review your credit report to ensure that all the information it contains is accurate, as errors on your credit report can negatively impact your credit score and ability to borrow money or obtain credit.
What Is A Credit Report?
A credit report is a detailed statement of your borrowing and repayment history. It
Credit reports are detailed statements of your borrowing and repayment history, as well as information regarding your credit accounts, such as credit cards, loans, and mortgages, which are compiled by credit reporting agencies(CRAs), such as Experian, TransUnion, and Equifax.
These CRAs collect information about an individual’s credit history from a variety of sources, including banks, credit card companies, and other lenders. The information is then used to create a credit report, which is used to help lenders assess a prospective borrower’s creditworthiness.
Credit reports typically include the following information:
- Personal information: This includes the individual’s name, address, Social Security number, and date of birth.
- Credit accounts: This includes information about credit cards, loans, and mortgages that the individual has opened, including the account balance, credit limit, and payment history.
- Credit inquiries: This includes a record of any times that the individual’s credit report has been accessed by a lender or other party.
- Public records: This includes information about bankruptcies, foreclosures, and other public records that may impact an individual’s creditworthiness.
When Should You Check Your Credit Report?
As mentioned, it’s extremely important that you review your credit report. This is because doing so can help you verify that your credit information is accurate. But, how often should you do so? Here are a few things to consider:
- Check your credit report at least once a year. It’s a good idea to check your credit report at least once a year to ensure that all the information it contains is accurate. This can help you catch any errors or mistakes that may be affecting your credit score.
- Check your credit report before applying for credit. If you’re planning to apply for a mortgage, car loan, or credit card, it’s a good idea to check your credit report beforehand. This can help you identify any errors or issues that may be impacting your credit score and give you time to address them before applying for credit.
- Check your credit report if you suspect identity theft. If you suspect that your identity has been stolen or you have been a victim of fraud, it’s important to check your credit report as soon as possible. This can help you identify any unauthorized accounts or activity and take steps to protect your credit.
Note that you are entitled to a free copy of your credit report from each of the three major credit reporting agencies once per year. You may also be able to obtain a free credit report in certain circumstances, such as if you have been denied credit, insurance, or employment due to information in your credit report.
You may, however, need to pay for any additional credit reports or credit scores apart from the free ones. Some credit card companies and other financial institutions offer free credit reports or credit scores as a benefit to their customers, but these are not the same as the free annual credit report provided by the credit reporting agencies.
Does Checking Your Credit Report Hurt Your Credit Score?
Hard inquiries, which occur when a lender or other party requests a copy of your credit report as part of a credit application or other credit-related action, can temporarily lower your credit score by a few points and remain on your credit report for two years.
Checking your own credit report will not hurt your credit score. This is because when you check your own credit report, it is considered a “soft inquiry,” which does not impact your credit score.
On the contrary, checking your own credit report may actually benefit your credit score. While doing so won’t improve your credit score, it’s a good way to monitor your credit and ensure that all the information it contains is accurate, which can help maintain it.
The Bottom Line
The importance of regularly checking your credit report cannot be understated. Reviewing your credit report at least once a year, before applying for credit, or if you suspect identity theft, can help you maintain a healthy credit score and protect your financial well-being.
That being said, checking your credit report can sometimes be a hassle and confusing if you don’t know what to look for. Enter credit restoration, the process in which a credit expert reviews your credit report and disputes negative information on your behalf to remove it.
Call us at 888-799-7267 to schedule a Free Credit Consultation.
