We commonly hear about why it’s important to monitor your credit report and score. This can be understandable once you’re established in a career and growing your wealth but it’s just as important, if not more so, when you’re young as something negative on your credit report can impact you in a number of ways. Added to that, there have been a number of security breaches recently. Remember Target? It’s things like that which should cause you to be mindful of your credit report as early as you can. Outside of security scares, hopefully, the following reasons should encourage you to watch over your credit report regularly.
It Can Save You Money Down the Road
Like it or not, but there are a variety of businesses that look at your credit score to determine what they’re going to charge you. While this has been banned in a handful of states it is still a widespread practice. Some of the companies that look at your credit score are:
- Car insurance companies
- Utility companies
- Landlords
That list is just to name a few, but if you have a lower credit score you’re likely going to be charged more money until you improve your score. This is also not to mention that your credit score will be used to base your loan rates for things like mortgages or car loans. Fair or not, it’s the nature of the beast. You can use services like Credit Sesame to monitor your credit score so you can go into situations with some knowledge of what you might be in for.
Because Potential Employers Do
I remember a job I had applied for a number of years ago and they questioned me about items on my credit report. They didn’t like I had maxed out credit cards on the report, even though they had been paid off for nearly seven years at the time. While it seems a bit unfair, it was a job in the financial services industry. They wanted to make sure I was not a risk to employ. More and more employers do this as a means to see how responsible and disciplined you are. If you’re just starting out this may not be as much of an issue as it’s easy to explain being new in the workforce, but make sure there is nothing negative on your report.
To Get Rid of Errors
The other major reason why you may want to monitor your credit report at a young age is you never know what kind of errors might be on your report. This is especially the case if you’re named after a parent. I’ve personally dealt with that numerous times and if left unchecked can impact your credit negatively. While it can be a pain to get items removed from your credit report, it’s much less painful than having to pay more because of unnoticed errors. You can access both your score and report through services like Credit Sesame, and you can also access your report for free from all three reporting agencies once a year.
How often do you check your credit report? Have you ever had to have an item removed from your report and if so, was it a hassle?
Image by Lending Memo / Flickr
I check my credit report all the time. I had someone buy a house using my identity when I was 13, so I have always regularly checked it because of that.
Wow, that’s crazy Michelle! I can certainly understand why you would be checking it then. 🙂
I often check my credit report because I want to ensure no one is using my identity and of course to make sure everything there is accurate. Credit reports impact our financial lives so it just follows that you pay more attention to it.
Completely agreed Agnes. They’re definitely important to stay on top of!
We’ve always stayed on top of our credit since we do use it. We own two homes and want to buy more rental properties. We also usually finance our new-to-us cars since the finance rate is lower than what we make on our investments (like my car’s financing rate is 0.9% right now and my husband’s is paid off).