What Happens if You Don’t Check Your Credit Report?

While it’s easy to get busy and overlook things like checking your credit report, this is really one of the last things you want to put off. It does take a bit of time and effort, but it’s nothing compared to the time and money it may cost by allowing fraudulent activity or negative information to accumulate on your credit reports! Here are some of the worst-case scenarios that can result from failing to stay on top of your credit.First Scenario: Not Discovering You’re the Victim of FraudIf a thief steals your identity (which may be done in many ways!), they can use your personal information to open credit lines under your name. These accounts will then appear on your credit file and, when the limits are maxed out, your credit utilization ratio suffers, along with your credit score. When they don’t make payments and the accounts get sent to collections or charged off, your credit will take a bigger hit. Even the credit applications the thief submits under your name will ding your credit.Second Scenario: You Don’t Discover Mistakes on Your ReportCredit bureaus make mistakes, and it’s not uncommon for consumers to find erroneous listings on their credit report. Common mistakes include information that isn’t yours (such as the wrong name or address), information from an ex-spouse, outdated information, incorrect payment status, improper delinquent dates on accounts, wrong notations on closed accounts and much more. Accounting to a study by the Consumer Data Industry Association, over 19% of consumers had inaccurate information on their credit reports.If you have mistakes on your credit report that you are unaware of, you may be paying higher interest rates or getting turned down for jobs or credit. Your credit score could be taking a huge hit from any number of errors as well.Third Scenario: You Don’t Discover Correct Negative Information that Can be DisputableIf you have negative information on your credit file, you have the legal right to dispute its legitimacy, even if it’s not an error. This can be an effective strategy for removing old debt that’s been sold to a collection agency, as the documents of proof are not always included in the sale. If the company cannot prove you owe the debt, you are not obligated to pay it and it should be removed from your credit report.What Should You Do?If it’s been more than 12 months since you checked your credit reports, do it now! You are entitled under the law to a free credit report from Experian, Equifax and TransUnion at AnnualCreditReport.com, which is the only website authorized to fill orders for the free reports you are entitled to under the law.Once you get your reports, look for fraudulent activity and notify the credit bureaus immediately to place a fraud alert on your reports. Dispute any erroneous listings immediately and remember you have the legal right to dispute accurate negative information as well.