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5 Reasons Dick Tracy Needs to Sleuth in His Credit Report

If you want to do a little detective work on your finances, one of the best places to start is your credit report. In fact, if you are a detective, you might need to know what’s in your credit report. After all, many of those employing people working in sensitive jobs are being asked to submit to a credit check before they get the job. A detective like Dick Tracy might need to have his credit report checked as part of a background check. Money problems might equal the risk of being vulnerable to bribery.

Actually, everyone should check their credit reports on a regular basis — and not just those looking to borrow money. Here are 5 reasons that you should check your credit report:

1. Know Where You Stand Before You Apply for a Loan

Before you apply for a loan, you should know where you stand. Your credit score is figured based on the information in your credit report. While you aren’t entitled to a free credit score, just for asking, you can take a peek at your credit report — for free — once a year from each of the major credit bureaus.

Even if you aren’t getting your report for free, though, it’s still a good idea to know where you stand, before you apply for a loan, whether you are applying for a credit card, or whether you are applying for a mortgage. It’s a credit myth that checking your own report or score will hurt you credit; you can check your own credit as much as you want, without being penalized.

Check your credit report, and know where you stand. If there are problems with your report, you will know to get them fixed, before you apply, so you can get the best possible deal.

It’s also worth knowing where you stand, since it’s not just creditors looking at your credit report anymore. Your credit history matters to insurers (and can affect your premium), cable TV providers (you might have to pay a security deposit) and landlords (you may be turned down for a rental). Your credit report provides you with clues about how others view you, and can help you see where you might stand when applying for financial products and services.

2. Make Sure All of the Information is Accurate

Another reason to check your credit report periodically is so that you can ensure that the information is accurate. In some cases, you might find that your credit report shows duplicates of loans. When this happens, it appears that you have more debt than you really do. Other problems could be a mistake in whether or not your account is paid as agreed, or a mistake in other important information. In some cases, a mistake on your credit report could have an impact on your credit score. You want to make sure that the information in your credit report is accurate — and dispute it if it’s not correct. It’s one of the best things you can do for your finances.

3. Look for Possible Problems from an Employer’s Perspective

If you are looking for a job, be aware that some employers want to have a look at your credit report (they’re not supposed to look at your credit score). However, the information in your credit report might make them think twice. If you will be handling money, or if you will be in a position of responsibility, some employers want to know that you don’t have money problems that can make you vulnerable.

In some cases, employers might make judgments about you, based on what’s in your credit report. It can help to have a look at your report in order to make sure that you know where the financial problem areas might be, and prepare to answer questions about certain aspects of your financial past.

4. Catch Identity Fraud

Your credit report can provide an indication that you could be in trouble because of identity fraud. In some cases, you might have an account listed on your credit history that you know you didn’t open. In that case, it might be a sign that someone has been using your good name to open a line of credit. This can impact your credit score — and it can be a sign that other personal financial information of yours might be at risk.

When you regularly check your credit report, you can catch problems while they are relatively small, closing fraudulent accounts and placing a credit freeze on your account so that it is harder for fraudsters to do more damage. You want to keep on top of things, and checking your credit report can help.

5. Make Sure Your Report has Been Updated

Once you have disputed items on your report, or asked to have a fraudulent account closed or removed, you will want to check your credit report to make sure the appropriate changes have been made. You will also want to check to make sure that a credit freeze remains in place if you feel you are still at risk.

If you don’t like the outcome of a dispute, and still feel as though information is wrong, or if you have an explanation for some of the information in your credit report, you are allowed to create a statement to be included with the report. This can give your side of the issue, and some creditors, employers and others might take it into account before making a decision. In any event, it’s a good idea to check, just to make sure your credit report is as accurate and up to date as possible.

Image source: Alan Light via Wikimedia Commons