A new survey conducted by online legal resource FindLaw.com reveals that 1 in 4 or 22 percent of Americans have never checked copy of their credit reports, despite the fact that consumers can order them free of charge under federal laws. The survey also found that consumers with lower incomes are less likely to check their credit scores at least once a year, versus merely 14% of consumers with household incomes over $75,000 per year said that they have never ordered a copy of their credit reports.
Why is it Important to Know Your Credit Score?
Knowing your credit score and checking your file for accuracy is a crucial step to bettering one’s financial standing or maintaining improvements. The accuracy of your credit report can affect you in the following ways:
- Prevent you from obtaining preferential credit deals, meaning that you will pay higher interest
- Credit reports are often used in background checks for jobs and rental housing, so can prevent you from being offered certain jobs of being able to rent particular properties
- If you have incorrect information on late payment or defaults, this can make it difficult for you to obtain a mortgage from many major companies
- Auto Insurance premiums may be higher or, in some cases, certain policies unavailable due to being classed as a high risk consumer
- Credit cards or loans may be harder to come by or interest rates significantly higher if your credit score is low.
Obtain Your Credit Score for Free
Federal law states that consumers are entitled to one copy of their credit report from each of the three major credit bureaus (Experian, TransUnion and Equifax) per year. Consumers can get these free copies at AnnualCreditReport.com.
What to Do if You Notice Incorrect Reporting in Your Credit File
- The Fair Credit Reporting Act requires credit reporting agencies, banks and credit issuers to correct fraudulent information on your credit report.
- You should contact the credit reporting agencies and credit issuers and let them know about the fraud.
- You will have to provide documentation, which the Federal Trade Commission explains here.
- Then, the FTC tells consumers to take the following steps immediately:
1. Place a fraud alert on your credit reports. A fraud alert will tells credit issuers that you’re a victim of credit fraud. They will contact you to verify any applications for credit before granting it to ensure that you and not is fraudster is the bona fide requester.
2. Close the fraudulent accounts. You’ll need to make contact with the fraud department of each card issuer to make sure you’ve closed all of the accounts. This means that the fraudster cannot access any more of your funds.
3. File a complaint with the FTC.
4. File a report with your local police, or the police in the community where the identity theft took place.
5. Continue to monitor your credit file closely and regularly. It is recommended to do this once a month after you have been a victim of credit fraud.
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