You see the hype on TV all the time. I even see it and I seldom watch TV. I've grown to like the guy who sings his little ditties about how life would be better if he had only gotten his free credit report earlier.
I thought the idea was a bit silly - until I did the research and found out WHY we should all be keeping a close watch on our credit reports. And why the free reports you can get annually from the credit bureaus are not good enough.
The first, and perhaps most important reason, is to know immediately if your identity has been stolen. Your credit report offers tell-tale signs. For instance, an incorrect address.This could merely be a data entry error, or it could be a sign that an identity thief is at work. By gaining access to your accounts and making a change of address, your thief can use your credit for a very long time without you knowing - because the bills won't come to you.
You might not find out until you attempt to borrow and find out that your credit has been destroyed.
The second sign is credit inquiries from companies you have not contacted. "Soft" inquiries won't show up - those are the routine checks done by credit card companies before they send you offers.
Another is, of course, accounts in your name that you know nothing about.
When you routinely check your credit report, or sign up for a monitoring service, you can take immediate steps to halt a thief in his or her tracks.
The second important reason, and the reason why the free reports from the credit bureaus aren't good enough, is that you need to know your FICO scores. Those reports don't include the scores.
If something has happened to lower them, it takes time to fix the problem. You don't want to wait until you need to use your credit to address the issue.
Use of your credit by an identity thief will lower your scores, but so will data entry errors, reporting mistakes, and the way you use your credit.
For instance, if you have 3 credit cards, each with a $5,000 credit line, and you have a $4,500 balance on one while the others show a zero balance, your score will be lower than if that balance was spread between the three cards. It makes no sense, but that's how it is.
Of course you want your buyers to come in with the highest scores possible, so urge them to get their report before they ever find the house they want to purchase. Then counsel them on ways to improve those scores. They'll love you when their interest rate is lower as a result!
For articles and advice on raising your credit scores and protecting your identity, please visit the site I built as a result of my recent resarch: www.allcreditscoresnow.com. I'm adding more articles weekly, so check back often.
Here's to lower interest rates!