Why You Should Always Check Debt Accuracy
Knowing your credit score is a hot button. People are very concerned about it. After all, your credit score dictates not only your ability to secure financing if needed and the interest rate you’ll pay, but it’s almost used as a sign of your financial success. After years of secrecy many banks and credit cards now show consumers their credit score for free. But it’s not the only show in town. The data used to calculate the all-important credit score is the data in the full credit report. This fact makes it imperative that you check debt accuracy.
What’s in A Credit Report?
A person’s credit report is usually pages and pages in length including the following:
- List of Accounts: A credit report includes a list of credit accounts both currently open or closed.
- Account Balance and Monthly Payment: Each account entry includes the current account balance and monthly payment reported to the credit bureau.
- Payment History: A calendar like chart showing whether each monthly payment was on time, late, or missed altogether for the last few years.
- Credit Inquiries: Your credit report also includes a list of recent inquiries by financial institutions.
Why You Should Check Debt Accuracy
Periodically verifying the accuracy of the information on your credit report is important for several reasons:
- Inaccuracies Affect Credit Score: Mistakes can happen. A payment can accidentally be marked late or a balance could be wrong. These things affect your credit score negatively and could affect whether you qualify for financing and how high of an interest rate you pay.
- Catch Identify Theft: If your credit report contains accounts you don’t know about, or inquiries have occurred you cannot explain, it may suggest someone has stolen your identify. Identity theft can wreak havoc on your finances for years if not caught and rectified.
Where Can I Get Free Credit Reports?
Two places you can obtain a form of your credit report for free are:
- Free Scores Online: You are allowed to one free copy of your credit score per year from each of the three major credit bureaus. Consumers can access each of them at this website.
- Credit Karma: A free tool that will show you your TransUnion credit score as well as your credit report information regarding your scores, accounts and payment history. It will also automatically email you when something changes with your credit.
Your credit score can have a profound effect on your life. It can affect your housing and transportation options as well as entrepreneurial opportunities. Your credit report contains the information used to calculate your credit score. By checking your credit report often to check debt accuracy you can ensure your financial trajectory is based purely on your choices and history.
How about you, Clever Friends, when was the last time you verified the information on your credit report?
Check out additional articles on Clever Dude:
- Monitor Your Credit Report and Credit Score For FREE!
- Consequences of Ignoring Credit Card Debt
- 5 Things to Look for When Choosing a Top Credit Repair Agency
Brock is a software engineer by day and personal finance blogger at night. He is a fitness junkie and enjoys grilling and smoking meat. Married with two children, Brock strives to improve his skills as a husband and father, and is always on the lookout to stretch his family’s budget as far as he can.