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Credit Card Applications » News » Other » Why Getting a Credit Report is a Good Idea

Why Getting a Credit Report is a Good Idea

August 14, 2009 | Updated on August 14, 2009
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The content is accurate at the time of publication and is subject to change.

Credit is undoubtedly the lifeblood of the American economy. Without credit, many consumers and their families would not be enjoying so many amenities and great things right now. People can buy anything they want without having to wait too long thanks to credit.

Unfortunately, not too many people take steps to monitor how they use their credit cards. Unbeknownst to them, their credit histories and records are crucial determinants used by most lenders, banks, and card issuers. Financial institutions assess applicants and borrowers based on their credit records. These records are good indications of a cardholder's credit worthiness.

Most Americans never fully understand the importance of maintaining clean credit reports. As a result, many consumers are confounded whenever their application for new car or housing loans is denied because of poor credit reports. A bad credit history is tantamount to having a stamp mark warning creditors to stay away from a consumer.

Lending companies and banks require borrowers to provide unblemished or relatively clean credit reports. This is their primary way of knowing whether a potential borrower can be trusted. Because of the large amounts often involved in loan transactions, lenders would always want to find out if their clients would be able to pay back their dues. One of the best ways to do this is to scrutinize their credit reports for any telltale signs of financial lapses.

Getting a credit report is relatively easily, especially since federal law allows cardholders to get hold of their records once a year from each of the three credit bureaus. These three credit agencies, Equifax, TransUnion, and Experience, are the only bureaus authorized by the federal government to issue credit reports to cardholders. Card companies and banks relay any relevant credit information like late payments and purchase histories to these three and they compile the data into consolidated reports. Any potential creditors or lenders can then access the records to see whether borrowers will be liabilities.

Availing of credit reports can also help cardholders monitor any suspected identity theft incidents. Since the records contain every detail of transactions, consumers often discover anomalies on their reports. Occasionally, they can even find evidence of card fraud or identity theft. Without credit reports, these crimes would have just gone unnoticed, leaving cardholders suffering from poor credit ratings and scores.

In cases of identity theft, cardholders can enroll in monitoring programs to keep close tabs on their credit reports. This would ensure that their records remain clean and untainted.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
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