With identity theft on the rise, more and more Americans are beginning to take credit score monitoring seriously. In addition to carefully checking their bank statements and other financial documents each month, they also run their credit report annually. But is that often enough?
Doesn't Running a Credit Report Hurt My Rating?
It's not uncommon for people to believe that if they run their credit report unrelated to a loan application, it will hurt their rating. This is false, but believing this myth can really cost you. For example, your credit score has a lot to do with whether or not you pay a higher interest rate on a loan. Your score determines whether or not you have to place a deposit for utilities. It's also part of what determines whether or not you qualify to be a renter. The fact is your credit score has a huge impact on your life.
What Can Hurt My Credit Rating?
For that reason, you should know what your score is and do some credit score monitoring at least once a year. Otherwise, there may be outdated or inaccurate items on your report that are having a negative impact on your credit rating.
So if running your credit report doesn't hurt your rating, then what does?
- Failing to pay rent and utility bills on time;
- Failing to pay a loan back in full;
- False charges due to identity theft
What Is Identity Theft?
Identity theft can happen when someone obtains enough information about you to make others believe they are you. They assume your identity and use it to open credit accounts at department stores or take out a loan on a home or vehicle. Since they are not you, there is no threat to them if they don't actually pay for the items they've purchased on credit in your name. When they fail to make these payments, it goes on your credit report.
Sometimes the annual credit check is the first a person learns that someone has begun to use their identity for financial gain. This is another reason why it's so important for you to run your credit report annually because the sooner you're aware that you've become a victim of identity theft, the easier it is to deal with.
In addition, you might consider using a credit score monitoring services like Identity Guard® which watches your financial information for signs of fraud. They then alert you so that you can resolve the situation quickly.