Tips for Financial Freedom: Getting an Annual Credit Report

Norm Plumstead

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Getting a copy of your annual credit report is important.  There a many reasons and the first one, although maybe not the most important – the copy is free!

Under the Fair and Accurate Credit Transactions Act, you have the right to view your annual credit reports from each of the three major credit bureaus for free once every 12 months. Remembering to do this is important; you can consider scheduling it around another significant event like your birthday.  Make it a birthday present to yourself. To get your free annual credit reports, request them from the federally authorized website: www.annualcreditreport.com

Now that we have your attention, and you know the process is easy,  and you can’t beat the cost, let’s zero in on why getting a copy of your annual credit report is so important.

Protect Yourself Against Fraud

You can stop identity theft and credit card fraud in its tracks. By checking and reading your annual credit report you can tell if someone is using your identity. If you discover any accounts that you did not open, it’s cause for alarm. If necessary, file an Identity Theft Report and freeze or place fraud alerts on your credit report to prevent further damage.

Fraud alerts, which are free, require issuers to contact you and confirm your identity before extending credit to you. After placing a fraud alert on your account, you can get additional free annual credit reports to make sure the fraudulent accounts were removed.

If you notice an unfamiliar account or inquiry, call the issuer and find out how it ended up on your report. If someone else has been using your Social Security number to apply for credit, or making purchases with your payment information, you may not notice the signs unless you take a close look at your monthly bank statements.  Watch for the small transactions.  Someone bent on fraud will try to test it first through very small purchases and if not detected will ramp it up and you’ll get hit with a bigger purchase.

Knowing Your Credit Score Can Save You Money

The good news -- having good credit can potentially save you thousands of dollars in interest payments over the course of your life.

If you’re happy with your credit now, reviewing your annual credit report and checking for any potential errors can ensure it stays protected year-round. This way, if you apply for a loan, you probably won’t have to scramble at the last minute to dispute errors, and you likely won’t have to shell out more in interest than you’d otherwise pay.

The bad news -- if you have poor credit, reviewing your annual credit reports can help you determine how to rebuild your credit. Instead of guessing at the problem, you’ll be able to see which negative situations are bringing it down.

Knowledge Keeps You Financially Fit

We’ve outlined some reasons why you want to check your credit report annually. Some other reasons include finding mistakes that have been sent to your credit report; making sure that the information on the report is current, and nothing is outdated or unusual. When checking your annual credit report, also be sure to check that your personal information is accurate and up-to-date.

Assuring that there are no mistakes is also important because errors on your annual credit report can also cost you to pay additional premiums for car insurance. By insuring that your credit score is accurate you are insuring that you are paying the lowest amount you can for your car insurance, thus saving a bit of money each year. Keeping a good credit report can also keep you in good standing when applying for certain jobs that look at your credit report for hiring purposes.

And of course, good credit will potentially save you thousands of dollars in interest payments over the course of your life because you will qualify for lower interest rates with good credit.

At Honor Bank, we are available to assist you in your credit journey to stay financially fit. We are ready to help. And we offer Identity Theft Protection to help, too.

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