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Why You Need to Check Your Credit Information

Regularly checking your credit information is vital because it can make or break you financially. Even the slightest mistake can cost you big. One late credit card or loan payment can send your credit score plummeting, ultimately making it harder for you to obtain a line of credit at a reasonable interest rate. It can even cost you a job.

Your credit information gives potential lenders a glimpse into how you've settled past debts so they can determine what kind of lending risk you pose today. That's why it's important to check it often.

Besides an occasional late payment, your credit information contains very revealing information compiled by the three credit bureaus — TransUnion, Equifax and Experian. Information about where you've lived and worked, if you've ever been sued or filed for bankruptcy, and whether you pay child support or have been arrested — all of that is only a click away from lenders, landlords, insurers and employers who want to learn more about you.1

One blunder can haunt you for seven to 10 years. You need to ensure that anyone who checks your credit information gets an accurate picture.

Manage your credit information the right way

  • Check your information. It's the first step toward building a positive credit reputation. Checking regularly also exposes any false information that may be hurting your score and allows you to fix it quickly.
  • Pay your bills on time. Lenders prefer working with borrowers who have proven to be reliable, so making on-time payments is a simple but effective habit for building good credit.
  • Maintain a lengthy line of credit. Get a credit card, and hold on to it. Use it sparingly, but do use it. If a credit card company cancels your card due to inactivity, it can adversely affect your credit history. Pay more than the minimum each month to avoid high interest payments.

Footnotes

  1. "Building a Better Credit Report" Federal Trade Commission. March 2008.

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