5 Reasons Why You Should Keep up to Date with What is Contained in Your Credit Report

Last Update: May 22, 2020 Credit Report

If you’ve every applied for credit then the lender will almost certainly have checked you credit report before making a decision on your application. If you’ve had an application turned down, and you’re not sure why, then you may want to see what’d in your credit report. In fact, there are several reasons as to why you might want to check the details and, considering it’s possible to get credit report for free every 12 months, it’s highly advisable to regularly check.

For a better idea of why you should keep on top of your credit report, the following explains five reasons why you should periodically check the details.

Your Credit Worthiness is Based on The Information Contained within

One of the more obvious reasons is simply to see what details might be contained within the report that might have an adverse effect on any application for credit. For example, if you’re applying for a credit card, a car loan, a mortgage or a wide variety of other credit lines, then the lender may check your details; furthermore, you might even have a credit check performed by your landlord prior to renting a place. So, along with credit checks for mortgages applications, the details of your credit report can have a major impact on where you can live.

Prior to making any application for credit, it can be a good idea to check your report, to avoid the risk of any unnecessary nasty surprises. Likewise, any failed applications for credit can have an impact on future applications, so be sure to check beforehand.

There Might be Erroneous or out of date Information of which You were Unaware

If you have been turned down for credit, it might be the case that there is some erroneous or out-of-date information contained within your file that is encouraging lenders to deny your application. In fact, it is far from uncommon for reports to contain mistakes, so it’s highly advisable to check everything in the report is relevant to you – sometimes mistakes can be made whereby the details of someone with a similar name get recorded under your details.

As well as obvious errors that shouldn’t be there, you might also find that there is out-of-date information that needs amending.

One important thing to be aware of is that not all of the three major credit-reporting agencies will necessarily be up-to-date. So, even if one of them looks good, it would be wise to check the others, as well. The three main credit-reporting agencies are: Equifax, Experian, and Trans Union.

Protect Against Identity Theft

Whilst you might think that you only need to check your credit report for reasons relating to your credit-worthiness, there is another important reason that you might not have considered – to protect against identity theft.

If someone has gained access to any of your personal information then they might have been able to apply for credit in your name without you knowing about it. This can lead to difficult financial and legal issues for you as you try to resolve any consequences of the identity theft.

Ultimately, the quicker you can identify any issues relating to identity theft, the easier it will be to minimize any negative consequences – including any future issues that you might have in obtaining credit. Therefore, you sure check to see whether there are any applications for credit on your file that were not made by you. And, if you notice anything suspicious, notify the relevant authorities and lenders immediately.

You Might have Difficulties Gaining Employment

Another reason as to why you might want to check your credit report, for reasons other than getting a loan, is because any negative details could potentially harm your chances of gaining employment, if your potential future employer decides to carry out a credit check.

Your employer might choose to look at your credit report to give them a better understanding of your responsibility when it comes to financial affairs, and might decide to turn you down if they see something that suggests you are financially irresponsible.

Alternatively, it’s possible that an employer might notice information that conflicts with some details that you’ve already given them – in which case, whilst they should theoretically seek further clarification, it’s possible that they doubt your honesty and integrity and, as a result of thinking you might have something to hide, they could refuse to hire you. Furthermore, it’s also possible that a potential employer notices some other details that might indicate that you will not necessarily be able to do the job according to the standards required.

Ultimately, with difficult financial times and such great competition in the job market, it’s unwise to allow any unnecessary and preventable reasons to have a negative impact on your chances of being hired for a job. Therefore, it’s sensible to check your credit report before applying for a position of employment.

The Interest Rate You Pay Can be Influenced by The Credit Rating

One final thing to be aware of is that, even if you do get approved for a line of credit, you might find that the details in your credit report have an influence over the rate of interest that you need to pay back for any credit you’re awarded.

For example, supposing you applied for a credit card but your credit report was not perfect – but still good enough to encourage a lender to provide you with credit – then, rather than getting a superior interest rate, you might be offered a product with a higher interest rate, meaning that you might need to pay back more on anything that you borrow.

As a result, even if you are not refused an application for credit, this doesn’t mean that everything is fine with your credit report. It might be that there are details that you can do nothing about; however, it might be that errors or out-of-date information are harming your chances of getting more favorable credit.



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