¶ Know Your Credit

Know Your Credit

Author: Ryann Cairns
Visit The Authors Website: www.sosdebt.org

Some Very Valid Reasons to Take the Time - Imagine if you met the love of your life but planned your life together without any knowledge or his or her family or anything that happened before you met them. Imagine that you went to work for a company that you don't know what they do, how they make money or how long they have been around. You just would not do that. And yet for some reason many of us blissfully do not do anything to learn the contents of our credit report.

Have you ever wondered what in you has that knee-jerk reaction when some advertisement encourages you to get a copy and your reaction is, "Oh why bother?" You know the value of good credit and how much impacts so many of your adult transactions. From getting a house or car loan, to being able to sustain credit cards that do so much for our daily operations to renting cars to getting our utilities turned on.

Just as our moral and ethical reputation in town has a direct impact on how well we live, our credit reputation, which is represented in our credit report, is a key document for our financial leverage. In this article, we will discuss some reasons for learning and keeping up on your credit report. If, after we finish our discussion, you are motivated to spend the tiny amount of money to order a copy and you improve your credit standing as a result, the time of preparation and the time you spent reading this article will be well spent.

Hey, That's Not Me!

It is the scary monster of this decade and we have all heard about it, identity theft. And yet, no matter how many reports and testimonials on it we have heard and about how awful it is for its victims, we go along our merry way thinking, "It can't happen to me." But you know that you use the same internet, the same credit sources and communications channels those victims did so you are just as at risk as they are.

We see dozens of commercials and get offers to help guard our identity but the simple step of getting a copy of your credit report is the single most powerful defense step you can do to protect your identity. That is because your credit report will list every account that you have open in your name and the activity on it. You know what credit vendors you are using very well, you pay bills to them every month. So if you spot accounts on your credit report that are not valid, you may have just cracked an identity thief and you can move swiftly to stop the use of that account before the damage to your finances is done.

That is Just Plain Wrong

While we all have great faith in institutions, errors can get into our credit report. If there is a bad mark on your credit record that is clearly not correct, that error will continue to exist there until someone steps in and fixes it. And that error will have a silent impact on your ability to use credit, quietly crippling your leverage. Who wouldn't want to clean up such a mistake and get back to the strong credit reputation you deserve?

Mind Your Own Business For many reasons, people put in an inquiry on your credit report to learn of your status. The good thing is each of those inquires is recorded and is part of your credit history. There are two strong reasons to know how many inquires to your report are happening and who they are.

First, too many inquires begin to reduce your credit worthiness. It implies you are applying for a lot of credit, which makes you look desperate. Financial institutions don't like desperate people.

Secondly, if people are inquiring on your credit that have no reason to be doing that, odds are it's for bad reason. Legitimate inquires are only for business or individuals you are in relationship with. If there are random, unexplained inquires, you may not be a victim of identify theft yet, but you may be on the hit list and it will be a red flag for you.

These are just a few of a variety of valid reasons for doing a routine check on your credit report. The report provides a wealth of information on recent activity on your accounts so it's worthwhile to make it a routine activity, no less than once a year to get a copy and sit down with a cup of coffee and really gain an understanding of it.

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