3 Signs It’s Time to Check Your Credit Report

a journal with "check your credit report" written in it as it lays on top of a table.

We want everyone to learn how to read a credit report, and to get in the habit of checking their own credit regularly. You can get a free credit report from each of the three major credit bureaus once per year by visiting www.annualcreditreport.com.

But when is the right time to check? Here are 3 signs it’s time to check your credit report:

1. It’s been a year

The free annual credit report available to you by law means you should be checking each credit report at least once per year. If you’ve never checked your credit report before, or it’s been at least a year, then it’s time to check now! Don’t wait for any other signs, go get your credit report.

One tactic we recommend is staggering your requests for the three credit reports available, so you get one every 4 months. For example, you might order your Transunion report in January, your Equifax report in May, and your Experian report in September. Then 4 months later, the year is up and you can order your Transunion report again.

The three reports aren’t always identical, so don’t expect a perfect match between them. The important thing is that you regularly order a copy, review it, and take appropriate action depending on what you find there.

2. You’re about to make a change

There are many changes that you could be made personally or financially that should make you want to pull a copy of your credit report:

  • New loan. If you’re applying for a new loan, look at your credit report first—the info there will determine whether your loan will be approved and what kind of interest rates you’ll pay.
  • New home. Whether you’re applying for a mortgage or renting, check your credit report before house-hunting. Your lender or landlord will check your credit, so you want to be sure the information there is accurate and reflects positively on you. Because a mortgage loan will be so large, it’s best to check all of your credit reports before applying for such a large loan.
  • New car. Auto loans and insurance both involve checking your credit reports. So before you sign any documents at an auto dealership, make sure you’ve reviewed your own credit first.
  • New job. Yes, some employers may check your credit report, too. A lot of places will want to be sure you’re not a financial risk, especially if you will be handling cash as part of the job. If your credit report is really alarming, that will be a red flag that could keep you from getting hired. And while most employers will only see credit history that is still within the statute of limitations, if you are applying for a job that pays more than $80,000 annually, the employer has the right to see your entire credit history from its beginning. However, at least ten states (California, Colorado, Connecticut, Hawaii, Illinois, Maryland, Nevada, Oregon, Vermont, and Washington) have passed a law preventing employers from pulling credit reports at all or limiting how and when employers may use credit histories to make hiring or other job decisions.
  • If your marriage is about to end, it’s really important for both parties to check their credit reports. There may be joint accounts you’ve forgotten about, and you’ll want to deal with them in order to make a clean break. If you don’t separate your finances when you divorce, it’s much more likely both of you will end up declaring bankruptcy.

3. Suspicious activity

Any time you have something suspicious that impacts your credit, identity, or personal finances should lead you to check your credit. Sometimes the signs won’t be glaringly obvious, but a closer look at your credit report might reveal more serious fraudulent activity beneath the surface.

Here are some common occurrences that should trigger a credit check on your part:

  • Errors on bank statements. Your bank or credit card lender might make a simple mistake, but if you see something wrong on your bank statement, it’s crucial that you get it corrected and look at your credit report to be sure there isn’t something more serious going on. The error might be an unfamiliar charge, or an incorrect address or phone number, or even a misspelling of your name. Any discrepancy in your identifying information could be the result of someone trying to compromise your account.
  • Not getting paper bills. If your bank statements or credit card bills aren’t showing up in the mail, someone might have already changed the address on your account and is intercepting your financial information. Or a thief might be stealing mail out of your mailbox in an attempt to get at your financial info. Either way, you need to pull your own credit report and make sure no accounts have been opened in your name, or your existing accounts haven’t been re-routed to a new address.
  • Collection activity. If you’re getting collection calls or letters about past-due accounts, check your credit to be sure someone isn’t using your data to get new credit. Whether it’s a deliberate act of identity theft or a mix-up on the collector’s part, you need to respond right away to stop the collection activity and secure your identity.

What to Do If You Find a Problem on Your Credit Report

If you find mistakes on your credit report, fix them right away. You have the right to send a letter to the credit bureaus disputing any items that are outdated or incorrect, and the credit bureau has to investigate and respond within 30 days.

You might feel the urge to panic when you find an unfamiliar account on your credit file, but the truth is, mistakes are very common— a mistake has been made rather than an act of fraud or theft. Either way, the incorrect items are easily corrected, and the law is on your side when it comes to disputing inaccuracies.

You can learn how to file a dispute from our Consumer Guide To Good Credit, which includes sample dispute letters. But it’s really important that you write your own letter. Use your own language to describe the situation and ask for the items to be corrected. If the credit bureaus can establish that you have used a simple form letter rather than written your own original letter, they can dismiss your dispute as “frivolous.” You must make sure the letter you send isn’t identical to a lot of letters the credit bureaus have received before, otherwise, their software could flag your letter as frivolous.

As you’re going through the process of asking for and reviewing your credit reports, bear in mind that none of this has anything to do with your credit score. You don’t need to pay anything extra to see your score if you’re simply checking your credit report. You might want to see your scores if you are about to apply for a major loan, but in most cases, you can stick with just the free credit report.

Remember, professional help is available if you have any questions about getting your reports or understanding what is on them. A credit report review can help you come up with a plan for getting your credit report updated and reflecting positively on you.

If you need help with credit or debt, or want to learn more about budgeting or personal finance, get started with free, confidential counseling and education right here at Credit.org.

Article written by
Melinda Opperman
Melinda Opperman is an exceptional educator who lives and breathes the creation and implementation of innovative ways to motivate and educate community members and students about financial literacy. Melinda joined credit.org in 2003 and has over two decades of experience in the industry.

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