What Every Consumer Needs to Know About Personal Credit Reports

During the course of our day-to-day lives, we come into contact with many different kinds of documents. Few have as much of an impact on our financial lives as personal credit reports. These documents are vital to our ability to buy a home, take out a car loan or even land a job. It is important for every consumer to know what these reports contain and how to check credit reports for any inaccurate information.

Potential lenders will first check credit reports and credit scores before making a determination. Any negative information in those credit reports may result in higher interest rates or even loan application denials.

One important thing that many people do not know about credit reports is that they are used for more than simple lending decisions. In fact, many employers routinely check credit reports of job applicants prior to making a hiring decision. These employers theorize that those who have a long and stable credit history are likely to be reliable, honest employees. Whether or not this is the case, be aware that employers are able to get your credit report and may factor credit ratings into their hiring decisions.

Many automobile insurance companies also view credit reports, factoring the information into their insurance rates. Studies have shown that there is, in fact, a correlation between credit ratings and accident claims. Consumers with the poorest reports are the most likely to file claims on their automotive insurance policies. This means that a poor personal credit report may force you to endure higher insurance rates than consumers with clean ratings.

It is more important than ever before for you to get your credit report and see what’s being recorded in your credit history. Fortunately, credit reports are easily available online through the three major credit bureaus and also through credit monitoring sites such as myprivatecredit.com. Consumer credit services offered by myprivatecredit.com make it easier than ever to check for potentially costly errors.

After you have received a copy of your personal credit report, carefully check that report for any errors. If you spot an error – such as a paid off account still shown as active or an on-time payment listed as overdue – contact the issuing credit reporting agency as quickly as possible to resolve the issue.

After a few weeks, follow up to make sure your reported errors are removed. Taking this extra step is vital to ensure that the report is corrected.

Unfortunately, it is all too common for personal credit reports to contain errors. Half of the reports examined in a 2000 Consumer Reports study contained errors. In 2004, a survey conducted by the Public Interest Research Group (PIRG) showed that 80% of all credit reports contain errors; with one in four serious enough to result in denied credit. These reports make clear the need to get your credit report now, if only to review and correct any errors that may exist. Errors on your credit report can cost you jobs, loans, and opportunities. Careful ongoing scrutiny of your credit history can help prevent these financial pitfalls.

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