Here’s Why You Should Check Your Credit Report Throughout Your Life

By Sanesh Mathew | February 20, 2018

Not been checking your credit report? Here’s why it is important for you to check your credit report at all stages of your life.

Here’s Why You Should Check Your Credit Report Throughout Your Life

If you chose to read this article, then you already know about credit report and the role it plays when it comes to your financial standing. However, for those of you who happened to stumble upon this post and have no clue about what a credit report or Credit Score is, here’s a quick intro to both these concepts.

Your Credit Score is basically a numerical representation of your creditworthiness which is based on your credit history. A good Credit Score gives you easy access to financial products and at attractive benefits too. But a bad score signifies a messed-up credit history and rejections are likely.

Additional Reading: All About Your Credit Score

Your credit report is a detailed report of your financial transactions – the Credit Cards you own, the loans you’ve taken, your repayments, payment defaults, the credit limit on your cards, and more. It is extremely important to check this report at least once a year. Here’s why we say so:

Know Where You Stand Financially

Checking your credit report gives you a fair idea about your present financial standing i.e. your outstanding debts as well as your present Credit Score. If your score is low, your report will help you identify which financial activity of yours is pulling down your score. This will help you improve your score, and thereby, increase your chances of getting great offers on loans and Credit Cards in the future.

Fix Any Errors

Your credit history contains information about your current and past loans, EMIs you’re servicing at present, Credit Card balance, payment defaults and more. Each time you apply for a loan or Credit Card, the lender will take a look at your credit history to determine your creditworthiness.

Any errors in your credit history regarding your outstanding loans or personal information can lead to rejection of your future loan applications. It may not necessarily be your fault. Your lender may have reported some wrong info to the bureau.

This is why we stress on checking your credit report periodically. It will help you fix such information errors or outdated info before it’s too late. All you need to do is contact your lender or get in touch with the credit bureau directly to get such mistakes rectified.

Psst! You can now check your Experian Credit Score on the BankBazaar mobile app anytime you want. Download the app now.

Keep An Eye On Suspicious Activities

Identity theft is common these days. Especially with the shift to digital payments, identity-theft incidents are bound to increase. An identity theft is when someone uses your financial information and makes transactions in your name, without your knowledge.

Don’t want to be a victim? Checking your credit report periodically will help you identify any such fraudulent transactions in your name.

Additional Reading: How To Read Your Credit Report

Now you know why it is necessary to check your credit report at least once a year. However, if you are still not convinced about checking your score often, please do check it at these three important stages in your life at least:

Before you move out of your parent’s house and survive on your own

So, you were dependent on your parents all these years and never had to worry about a thing. Great! But, mind you, if you’re planning to start an independent life, it isn’t going to be easy. And your credit is going to play a major role. For instance, if you’ve got plans to buy a house, you will need a Home Loan to help you with the purchase. And if you have a bad credit history, your chances of getting a loan is bleak.

What if you say that you are going to be renting a place? Well, you’d still require a loan at some point in your life. Say, you want to furnish your apartment or want to buy the latest Xbox to beat boredom, and a consumer loan is the only solution. A bad credit history ain’t going to help you get one.

Checking your credit report (and making sure things are in place) before moving out can save you from unpleasant surprises. Period.

Before you get married

Marriage is another life-changing event in a person’s life. Marriage brings along more responsibilities and new financial goals. For instance, you may want to go on a long honeymoon with your spouse or buy a house for your spouse and kids. And you may have to depend on a loan to fulfil these. And your credit history and score will play an important role in determining your eligibility for a loan.

We suggest you check your score before making a major life decision like marriage, so you’ll have a better understanding of your finances and can plan your future goals accordingly.

P.S. If you haven’t heard already, there was a recent research that concluded that your Credit Score determines your compatibility with prospective partners. Read all about it here.

Additional Reading: Drama Lama in ‘Credit Score – The New Matchmaker’

Before you retire

Retirement is another major life-changing event. And there may be numerous instances where you’d require an extra helping of cash in your golden years. For instance, you want to renovate your house or go on a trip around the world or you just want a big fat wedding for your kid.

Whatever may be your reason, you’ll have to depend on a loan especially if you don’t want to shell out your lifetime’s savings in one go. Therefore, we suggest that you take a good look at your credit report before you retire. This will help you fix any negatives when you’re still employed and earning.

From the time you start working till you retire and beyond, your credit report and Credit Score are the key to your finances. Get your Experian Credit Score for FREE by clicking the link below.

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Category: Credit Score

About Sanesh Mathew

A talkative sleepyhead, Sanesh, enjoys watching horror movies, listening to music, reading all things related to personal finance and wandering aimlessly (walking meditation, he calls it!). He refers to himself as a 'simple human being with a rather chaotic mind'.

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