Whenever you apply for a loan or a credit card, credit card issuers, banks or lenders always check your credit report. Your credit report is a reflection of your financial behavior. They use your credit report for making decisions like whether they should approve your application or not. What should be the interest rate and other terms of the loan? So, if they are checking your credit report, you should also check. If your credit score is low (580 to 619), poor (500 to 579) or bad (300 to 499), you need to know how to rebuild credit. Now, how often should you check your credit report?
The answer to this question depends on your situation. However, you should check your credit report at least once a year. This is the reason why credit bureaus annually provide you with one free copy of your credit report. In addition to this, you should get and review your credit report under some specific circumstances, including:
- Before applying for a car loan or a home loan.
- Before applying for a job.
- To protect yourself from identity theft.
Always check your credit report a few months before applying for a loan or a credit card. You want to get all errors corrected before applying for a loan or credit card. An error or a late payment always affect your credit score. You can identify, dispute and correct some incorrect information in your credit report. Even when the late payment never occurred, if you are not disputing, it will not be deleted and the lenders will consider this late payment. So, always dispute and resolve errors and incorrect information before applying for a loan or credit card.
How to review your credit report?
It is easy and free to check your credit report. As you know, there are the following three major credit bureaus:
All three credit bureaus provide free copies of the credit report annually. You can also visit some websites providing credit reports. You need to provide some basic information and answer some questions to verify your identity to get your credit report. You can check your credit score anytime you want without paying anything. As checking credit score is a soft inquiry, it leaves no negative impact on your credit report. Check: all lucky draw number
What is the difference between checking credit report and credit score?
Your credit report shows your credit activities with details. This includes both open and closed accounts. The report also reflects your credit history.
Credit score, on the other hand, is a three-digit number. The information in your credit report is used to calculate your credit score. Your credit score tells whether you are a risky borrower or a trustworthy borrower. If you have a good credit score, you are a trustworthy borrower. On the other hand, if you have a bad credit score, you are a risky borrower and you should learn how to rebuild your credit. Your credit score indicates whether you are responsible with your credit or not. You should check your credit score regularly as it helps in spotting identity theft or some other mistakes in your credit report. If you notice an unexpected drop in your credit score, there is something wrong. You need to check it and fix it.
Does checking credit report impacts credit?
No, it does not. It’s a soft inquiry when you check your credit score or credit report. On the other hand, when a lender checks your credit report, it is a hard inquiry. Hard inquiries have a negative impact on your credit score. So, you should avoid multiple hard inquiries within a short span of time.
If your credit score is below 580, before you learn how to rebuild your credit, you should learn how to get and review your credit report.