Once upon a time, if you wanted to see what your creditors were saying about you, you had to pay a fee. Fortunately, enough consumers and legislators spoke up about the right to receive free credit reports and the FACT Act was passed. This act lets you get one free credit report every year from each of the three major credit bureaus – Equifax, Experian, and TransUnion. But why should you order your credit report every year?
To Detect Identity Theft
Identity theft occurs when someone uses your identity – your credit cards, social security number, drivers license number, name, address, or other personal identifying information – to open accounts in your name or access your current accounts.
Most of the time, identity theft goes undetected. You might not find out your identity has been stolen until you try to apply for a loan or other credit-based service. If you don’t make any of these types of applications, you might not find out until collection agencies begin to call you demanding payment for accounts you never opened.
To detect identity theft as early as possible, it’s important to review a copy of your free credit report each year. Since you don’t have to pay anything for the report, there’s no loss to you.
To Ensure Accuracy
Creditors, lenders, landlords, employers, and service providers all use your credit report to make financial decisions about you. It’s up to you to make sure the information included in your credit report is accurate.
Clerical errors happen all the time. Transposed numbers or a slip of the finger can put someone else’s negative information on your report. It’s possible for your creditor to make a mistake in reporting your information. An account you paid on time could end up getting reported as being 30-days late. You’d never know if you didn’t get your free credit report.
To Gauge Your Debt Level
Since your credit report includes most, if not all, your credit accounts, you can easily use your free credit report to determine how much debt you owe. Simply review the latest copy of your credit report to tell who owe and how much you owe them.
Without your credit report, you’d have to go through a rigorous process of finding all the latest statements from your creditors.
Your credit report contains a wealth of information. It makes sense to take advantage of the free credit report you are entitled to receive each month to make sure what’s being reported about you is accurate.