Right at this very moment, there’s a good chance that you are being robbed. You may not feel it or be aware of it at all, but theft could be happening right under your nose. How? Not in the way one might usually envision a robbery. This theft can occur when you’re deprived of the opportunity to get finances that you have every right of getting. And this can happen when banks and lenders refuse to offer you credit and loans.
We’re not saying that lenders are stealing from you – the cause for this deprivation of funds really isn’t the banks and lenders themselves. The cause could be just one thing: your credit report. Your eligibility for a loan all depends on it, and so if it appears shady you’ll never get the loan you need. So though you may feel secure right now, there’s a chance your credit report isn’t allowing you access to needed funds.
What is a Credit Report?
So what is a credit report, and why does it have so much power over deciding whether you are eligible for a loan or not?
A credit report is basically a summary of your credit information and history, and helps determine how well you manage your debts and finances. It indicates all the payments you were unable to make, loans you were denied or your lack of credit and loans. Because of its comprehensiveness regarding your financial background, banks and lenders use it as a basis for whether they accept your application for credit and loans or not.
Why Check It?
While credit reports may be comprehensive, they are not always right, and that is why there’s always a need to check your credit report for yourself. Below we expound on the importance of diligently checking your credit report:
- Anomalies & mistaken entries – As already stated, credit reports can be flawed. They may indicate unpaid loans or credit cards you have no idea about, incorrect debt amounts and information about you that isn’t current or correct. According to a study in the United States, over 20 per cent of a thousand respondents discovered anomalies in their credit reports, and around 5 per cent of these errors were grounds enough for them to be given higher interest rates or denied loans. By simply checking their credit reports and correcting anomalies, almost 1 out of 10 of them were able to improve their credit score by up to 25 points, making them good and eligible for personal loans, mortgages, checking accounts and many other types of loans.
- Possible fraud & identity theft – Wrong entries in your credit report could just be honest mistakes, but they could also be signs of possible fraud and identity theft. Someone may be using credit cards under your name, stealing your identity and damaging your credit score.
- Protecting against abusive lenders – Checking your credit report can help you spot and correct anomalies that are preventing you from getting approvals for credit and loans, and help you see exactly how credit worthy you are. This will prevent lenders from charging you higher interest rates or offering you the wrong type of loan.
- Seeing your credit potential – Checking your own credit report can help you see if you’re eligible for a loan, if you appear trustworthy to lenders, and if not, will give you time to improve your score.
Loans and credit may be far from your mind right now, but they are never far from your credit report. Make sure your credit report is always accurate and keep yourself protected from the consequences of poor credit reporting.
Debra Wright is a Marketing specialist, cupcake enthusiast and online author trying to make a mark in the web in not less than 500 words. Her motto: keep to your side of the bed.