Whether you are preparing to apply for a mortgage or simply want to give yourself a financial check, it is a good idea to credit report. You actually have three different reports, one for each of the three major credit bureaus – Experian, Equifax and TransUnion. Since each agency collects information about you, it is a good way to keep up to date with a different credit report every four months.
But what specifically should you pay attention to when reading your credit report? Here are a few key items to focus on.
1. Past due debts
If you are behind on your financial obligations, this could be your creditworthiness in a very big way. That’s why it’s important to watch your credit report for overdue bills or overdue bills. That way, you have the chance to dispute or try to fix any negative item you come across. This can be easier than worrying dealing with direct debits and debits.
2. Your credit utilization ratio
Your credit utilization ratio measures the amount of available revolving credit that you use at one time. If that ratio goes above 30%, it could hurt your credit score, so it’s a number you want to keep a close eye on.
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Your credit report will show you what your outstanding credit card balance looks like. From there, you can take steps to reduce your usage by paying off existing debt or requesting higher credit card limits.
3. Credit inquiries
Every time you use a credit card or loan, you get a hard question about your credit report. One or two investigations shouldn’t cause too much damage, but too many investigations within a short span of time can hurt your credit score.
When checking your credit report, make sure you recognize the source of those questions. If a lender or credit card company took your credit but you never applied for it, you should look into it. It could mean that someone has obtained your personal information and is trying to open an account in your name.
Read our guide on the. For more information on credit inquiries difference between hard and soft credit checks.
4. Reporting errors
Unfortunately, credit report errors are quite common. But correcting them should improve your credit rating. What mistakes should you pay attention to? First, make sure that in your credit report, each loan or open account is listed only once. Duplicate listings can increase your credit utilization ratio and hurt your score in the process.
Also, keep an eye out for new accounts that you never opened in the first place. If you see an account that you don’t recognize, it could be a matter of fraud or just a fundamental mistake on the part of the reporting company.
Finally, make sure that any overdue debts on your account are actually past due. You may have settled a debt years ago, but somehow it was never cleared from your credit report.
To learn more about how to dispute a reporting error at any agency, check out our step-by-step guides:
Checking your credit report is one of those important things you should try to do a few times a year. And given the amount of fraud that has taken place during the pandemic, now is a good time to be extra vigilant. The good news is you can get it free weekly credit reports until April 2022. So there is no excuse to take a thorough look at yours.
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