Your Credit Report and Preventing Debt
The need for an accurate credit report cannot be overestimated since credit plays a major role in determining such things as loan approvals, interest rates, and even employment opportunities. From a financial perspective, it is certainly in an individual's best interest to review their credit reports on a regular basis to make sure that the reported information is accurate and up to date. A failure to take this precaution often causes damage to those who can least afford it. Higher payments are generally associated with higher interest rates, so you may be denied credit for a debt consolidation loan. Poor credit can have such a negative impact on a person's life so it is critical to be on guard against some of the common inaccuracies that occur on credit reports.
A common error is crossed identities where your credit may be mixed with another individual. This other person generally has a name which is very similar to your own. Verify that payments have been recorded as paid and current. If this information is incorrect it could be the result of a simple human error and can generally be corrected easily. Watch out for unauthorized charges as many times these charges are often the result of fraud. Make sure and contact your creditors immediately to report the incident.
Be careful when applying for additional credit as a high number of credit inquiries can reflect poorly on your credit score. Be aware that a creditor cannot run your credit without your advanced approval. Watch for Identity theft because when this crime occurs you will often notice new accounts have been opened fraudulently under your name. Often these thieves will also run up the balances on your existing accounts. If you suspect that identity theft has taken place contact the proper authorities immediately.
Prevention is the key to avoiding damaged credit as a result of reporting inaccuracies. It is wise to check out your credit report from each of the three major credit reporting agencies (Trans Union, Equifax, and Experian) on an annual basis. The cost is free or minimal and well worth it. If you find an error on any of your reports than quick action should be taken to initiate corrections.