Discover errors on your credit report before they hurt you financially Reviewing your credit report can help you avoid costly errors. Studies have shown that anywhere from 50% to 70% of credit reports contained errors. The most common error occurs when the information of another person, with a similar name or account number, is recorded in your credit profile.

To track your history of payments: Potential lenders want to see a history of timely payments before they’ll consider offering you a loan or credit. Check your report to see that your payments are being reported accurately to the credit reporting agency (CRA). A history of late payments will result in higher interest rates being charged or having your credit application or a loan denied. Late payments will also lower your FICO score.

To detect identity fraud and/or credit fraud early: Identity fraud is the fastest growing crime in the U.S., according to the Federal trade Commission. Why should you care? You should care because when someone steals your identity and opens new accounts in your name, running up large balances, you will be responsible for paying back those balances! Accounts that appear on your credit report that weren’t opened by you could be a sign of identity theft.

To make sure only authorized inquiries have been made: When reviewing your credit report make sure all of the listed inquiries were authorized. If there are unauthorized inquiries, write to the credit bureau and to the company that made the inquiry informing them that you did not authorize the inquiry and to remove it from your credit file. Potential creditors may regard too many inquiries within a short period of time as a negative and can result in the refusal to extend further credit.

A credit report is similar to a resume. Just like your resume reflects your employment history and your credit report describes your credit history. In the twenty-first century, there are few documents that have a greater impact on the lives of Americans then their credit report. Credit rating determines one’s ability to buy a home, a car, or to obtain a credit card or a job. Checking your credit regularly ensures that the information is accurate. Good luck.