Monitor Your Credit

Why should I monitor my credit?

You open your mailbox and find a letter from a collection agency. It states that you purchased a stereo system for $2,000 and have not made any payments, and that the creditor has now taken these matters up with the collection agency. Unfortunately, you do not recognize the creditor because you never opened an account with them. But somehow, someone used your name and credit and stuck you with the bill.

You have your eye on the perfect car--it fits your style and your pocketbook. When you apply for your auto loan, you discover the lender denied you because your credit showed a history of late payments. Yet you have always paid all your bills on time every single month.

You have decided to apply for a new credit card. You find an offer for a card that has the lowest interest rates and would enable you to transfer all your balances from other cards to this new card. Yet when you apply for the additional credit, you are rejected--after doing some research, you find that someone who has a name similar to yours has applied for credit several times during the last few months and somehow, your files have become mixed.

Don't let your credit report take you by surprise!

Situations such as these can happen at any time -- maybe when you need your credit the most. So why wait until it's too late to check your credit? Monitoring your credit report on a regular basis is a good way to maintain accuracy of your credit information so it's ready to be reviewed by lenders, landlords, or employers.

The information on your report is compiled by the credit bureaus, which regularly receive data from creditors such as whether you make payments on time and how much you owe. Since creditors are constantly reporting new information to the bureaus, your credit report is always changing.


What should I be looking for?

In a word, inaccuracies. Mistakes are not entirely uncommon on credit reports when information is reported to the bureaus by creditors and lenders. Sometimes mistakes are caused by simple human error, other times they occur when credit files of people with similar names are inadvertently mixed. Increasingly, unfamiliar or inaccurate information can also be an indicator of identity fraud--when someone uses your name and accounts without your knowledge. Look closely at the following areas in your credit report to catch any unfamiliar items:

Personal information-- This information is reported to the credit bureau by your creditors or other sources, and includes your legal name (and any name variations), date and year of birth, employers, and information about your residence.

If you find an incorrect address or unfamiliar suffix, such as Jr. or Sr., it could be an indication that your file may have been mixed with that of another person. Additionally, an unfamiliar recent address change may indicate that someone is fraudulently opening accounts in your name, but routing the bills to a different address.

Accounts--This information includes credit accounts or loans you have with banks, retailers, credit card issuers, and other lenders. It details information on each account you've opened in the past, such as your credit limit, current balance, and date the account was opened. Check the detailed monthly payment information for incorrect late payments or charge-offs. Also, remember to check for unfamiliar accounts or activity on accounts that you thought were closed. Someone besides you could be using the account, and could indicate a sign of potential fraud.

Inquiries--This section shows you who has received information from your credit report during the last two years. There are two types of inquiries you should be aware of:

• "Above the line" or "hard" inquiries will appear on your credit report when your credit is reviewed by potential creditors with which you have applied for credit. Be on the lookout for unfamiliar inquiries that may appear, as this may indicate possible illegal activity.
  
• "Below the line" or "soft" inquiries do not appear to creditors and do not hurt your credit score. These include inquiries made by prospective employers, pre-selected credit offers from credit marketing companies, and personal inquiries, such as when you check your own credit report.
  

Public records--This information includes any information that's contained in state and county records, but is limited to tax liens, lawsuits, and judgments that relate to your debt obligations.

Again, make sure the information here is correctly reported, as this information stays on your report for up to 7 to 10 years.

Next steps

If everything looks accurate once you've reviewed your credit report(s), then you can breathe easy. Just remember to regularly monitor your credit to make sure everything stays accurate.

If you do happen to find a mistake, then you have the right to dispute the information free of charge. You should contact the credit bureau that provided the information to request an investigation into any inaccuracies. You can also contact the creditor and ask that new, accurate information be provided to the credit bureau.

Finally, if you suspect fraud, contact the credit bureaus immediately and place a fraud alert on your report. Then, contact your credit card companies, bank, and the police to file a report and protect your accounts.

Click here to get started monitoring your credit, and get a FREE CREDIT REPORT!

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Why Should I Check My Credit Report Regularly?


To detect identity fraud early

We all know we should check our credit card statements every month for charges that we haven't authorized. But that only catches the thief who uses an account you know you have.

Identity fraud has risen dramatically since its debut on the crime scene. In this insidious form of credit fraud, a thief steals your good credit by taking over or opening accounts in your name, running up large balances, and leaving you to deal with the collectors when they come calling.

New accounts opened with your identity will appear on your credit report, revealing identity fraud to you. If you don't check your credit report, it could be months before the credit grantor, fed up with nonpayment, turns the account over to a collector who tracks you down and demands payment for a loan unfamiliar to you.

As with much less problematic inaccuracies, identity fraud is something you can detect and remedy more effectively by checking your credit history thoroughly and on a routine basis.

Click here to get started monitoring your credit, and get a FREE CREDIT REPORT!

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