The Ultimate Guide to Regular Credit Report Checks: Protect Your Financial Health with O1ne Mortgage

In today’s fast-paced financial world, maintaining a healthy credit score is more important than ever. Your credit report is a crucial tool that lenders use to determine your creditworthiness, and it can significantly impact your ability to secure loans for major purchases like homes, cars, and more. At O1ne Mortgage, we understand the importance of keeping your credit report in top shape, and we’re here to help you navigate this essential aspect of your financial life. Call us at 213-732-3074 for any mortgage service needs.

How Often Should You Check Your Credit Report?

At a minimum, it’s recommended to review your credit reports annually. However, given the dynamic nature of financial activities, quarterly reviews are preferable. Regular checks can help you stay on top of your credit and address potential issues before they cause significant damage to your credit score.

Key Times to Review Your Credit Report:

• Before Major Purchases: At least three months before applying for credit to fund a big purchase, like a house, car, or boat.
• After Data Breaches: If you receive a notice about a data breach.
• If Personal Information is Stolen: If your wallet, credit card, or personal information (like your Social Security number) is stolen.
• After Major Financial Changes: Such as opening a mortgage account or paying off student loans.
• Unexplained Credit Score Changes: If you see a dramatic swing in your credit score and don’t understand why it happened.

To help you remember, consider setting calendar reminders based on how often you want to review your reports.

Why It’s Important to Check Your Credit Report Often

Regularly reviewing your credit reports can help you build and maintain a good credit history and minimize the potential risks of negative information. Here’s how regular credit monitoring can help:

Stay Proactive Against Fraud and Data Breaches:

In many cases of identity theft, victims are unaware that their personal information has been stolen and used without their permission. Criminals may use your name, Social Security number, and other details to fraudulently open credit accounts in your name. When checking your credit reports, watch out for accounts you don’t recognize, particularly if there’s negative information, such as past-due payments, attached to them.

Spot and Dispute Errors:

Damaging credit report errors are uncommon, but they do occur. If you find any information on your credit reports that seems incorrect, you have the right to file a dispute with the corresponding credit reporting agency. This includes any errors related to potential identity theft or fraud.

Ensure Accurate Payment Reporting:

Your payment history is the most important factor in your FICO® Score, so it’s crucial to ensure that your on-time payments are being reported accurately. This is particularly true if you’re working to build or rebuild your credit history. Even a single late payment on your credit reports can cause significant damage to your score.

Identify Areas for Credit Improvement:

There are several general steps you can take to build a positive credit history, but the best actions for you to take will depend on your unique credit profile. Whether you’re working to rebuild a bad credit score, planning to apply for credit in the near future, or simply want to maintain a good credit score, your credit reports can show you which areas to focus on.

How to Check Your Credit Report

There are three different ways you can check your Experian credit report:

1. Online: Register with Experian to get free access to your FICO® Score and Experian credit report.
2. Mobile App: Download the Experian app on your Android or iOS mobile device and set up an account to check your FICO® Score and Experian credit report on the go.
3. Via Mail: If you’d like a physical copy of your Experian credit report, you can download a request form and mail it to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. You should receive your report within 15 days.

Alternatively, you can get free weekly copies of your credit reports from the three national credit bureaus (Experian, TransUnion, and Equifax) through AnnualCreditReport.com.

What to Look for When Reviewing Your Credit Reports:

• Personal Information: Ensure your name, Social Security number, addresses, and other personal details are accurate.
• Credit Accounts: Review all pertinent information for each of your credit accounts and collection accounts, including the name of the creditor, the account status, your current balance, recent payments, and other details.
• Inquiries: Hard inquiries, which typically occur when you submit an application for credit, can affect your FICO® Score for 12 months. If you have multiple inquiries on your report, consider minimizing new credit applications. Soft inquiries won’t affect your credit score.
• Public Records: If you’ve filed for bankruptcy, you’ll find details about the public record.

What to Do if There’s an Error on Your Credit Report

Some credit report errors are harmless, while others could potentially wreak havoc on your credit score. Common errors may include:

• Incorrect payment history or balance information
• Inaccurate account status (e.g., a closed account listed as open)
• A single debt listed more than once
• Inaccurate personal information, such as a Social Security number with transposed numbers
• Accounts belonging to someone else with a similar name

Regardless of the nature of the error, you have the right to dispute any inaccurate information you find with the credit bureau that’s showing the error.

How to File a Dispute with Experian:

1. Get Started: Visit Experian’s online Dispute Center to start a new dispute. You can submit a dispute online, over the phone, or via mail.
2. Review Your Credit Report: Identify the information you’d like to dispute and select a reason for your dispute.
3. Provide More Information: Add more information to expand on your request. If you have documentation supporting your dispute, such as communication from a loan company saying you paid a loan in full, include it in your request.
4. Submit Your Request: Once you submit your request, the credit bureau will investigate it, typically resolving it within 30 days. If you’ve registered with Experian, you can check the status of disputes through your online account.

Does Checking Your Credit Report Hurt?

Checking your credit report won’t have any impact on your credit score because it’s considered a soft inquiry. Here’s a quick summary of the differences between soft and hard inquiries:

• Soft Inquiry: Occurs when you or someone else checks your credit report for reasons unrelated to an application for credit. Examples include prequalification tools, prescreened offers, and landlord credit checks.
• Hard Inquiry: Typically occurs when you submit an application for credit, though some lenders may utilize a soft inquiry instead.

Both types of inquiries remain on your credit reports for two years, and hard inquiries can negatively impact your FICO® Score for 12 months. However, the effect is usually minor and temporary.

The Bottom Line

Checking your credit report is part of guarding your credit health. It should be done more frequently when you are preparing to use your credit to fund a large expense, but also when you know that you are at risk of fraud, such as after a data breach or when a credit, insurance, or Social Security card is stolen.

At a minimum, it’s a good idea to check credit reports at least once a year. In between annual peeks at your credit report, credit report monitoring can alert you to changes in your credit report. Experian’s free credit monitoring can help tip you off to potential identity theft as well as help you avoid surprises when you apply for credit.

For any mortgage service needs, O1ne Mortgage is here to assist you. Call us at 213-732-3074 to speak with one of our experts and take the first step towards securing your financial future.