Are you monitoring your credit on a regular basis? If not, then you should be. There are two main reasons why it is so important that you do so.
First of all, regular monitoring is advisable in order to ensure the accuracy of your credit report. The information contained in your report can directly affect many different aspects of your life.For example, it can determine whether or not you are approved for a car or home loan, what interest rate you’ll be charged on your loans, how much you’ll pay for insurance, whether or not a landlord will rent his/her property to you, and even whether or not an employer will choose to hire you. You should not assume that all of the information in your credit report is accurate. According to a 2004 study, nearly 80% of all credit reports contain errors, and about 25% of these errors actually impact the credit score. Given the tremendous importance of your credit report, you would be wise to do what you can to ensure that the information contained in it is as accurate as possible. By regularly reviewing your credit reports for inaccuracies, you’ll be able to bring them to the attention of the various credit bureaus and have them corrected.
Secondly, regular credit monitoring is an absolutely essential tool in the battle against the rising tide of identity theft. It is estimated that up to 10 million Americans are victims of identity theft every year, and for many of these victims, it can take years and lots of hard work to set their records straight. People who regularly monitor their credit can identify suspicious activity early and can then take action immediately to stop a potential identity thief in his or her tracks. On the other hand, if you don’t monitor your credit regularly, an identity thief could do a tremendous amount of damage to your credit before you ever realize that anything is wrong. Therefore, monitoring your credit is extremely important because the sooner you become aware of suspicious activity on your credit report, the sooner you can take corrective action and the better your chances of limiting the damage. (Understand, though, that credit monitoring is only ONE defense against identity theft; there are a number of other steps you can take to protect yourself–but that is the subject for another article!)
As important as credit scores are in many aspects of our daily lives, it is surprising that millions of Americans do not monitor their credit regularly, and many have never even seen a copy of their credit report. Don’t be one of those people who never even think about their credit until there is a serious problem with it. Be proactive by monitoring your credit regularly. A good credit rating is one of your most precious financial assets.
Copyright © 2009 Art Garmon, Ph.D. All Rights Reserved.