They say ignorance is bliss, but this cliché definitely does not ring true when it comes to a credit report. In fact, being ignorant about your credit can be down right dangerous.
Whenever you want to make a financial move, whether it is buying a car, renting an apartment, or buying a home, your credit report will follow you. And if the financial history that exists on this report is less than stellar - whether it is the result of your own bad spending habits or an identity thief's activities on your accounts -- you could be financially paralyzed.
Your credit report alone does not say whether or not you pose a credit risk to potential lenders - instead, it provides lenders with the data they need to make that decision on their own. The financial information has been organized on a credit report via one of the three national credit bureaus. These credit bureaus, also known as credit reporting agencies, collect information about your financial actions from lenders, landlords and creditors and sell that information to businesses so those businesses can make an educated decision as to whether or not they want to do business with you.
Your credit report has a huge impact on whether or not you can:
Rent an apartment
Buy a house
Buy a car
Lease a Car
Buy a boat
Get a job
Because your credit report has such a great impact on what you can do financially, it is important that you check your credit report regularly. By checking your free credit report before you make a big financial move, you will get a good sense of where you stand financially before you are surprised at a negotiating table.
And perhaps even more importantly, by reviewing your free credit report you scan your financial history for any signs of identity theft - a rampant crime these days. Your credit report lists all accounts open in your name, so if you see any accounts you do not remember opening or any other information about yourself or your finances that seems suspicious, you can take care of the situation right away.
You can obtain a free annual credit report at www.annualcreditreport.com. They also have the tools to dispute incorrect information on your report.