There are cheesy ads all over TV these days for a free credit report.  They do make a good point about checking your credit report each year – this is a very wise idea.

Benefits of getting your free annual credit report:

1. It’s free!!! No further reason needed, but we’ll give you more below. If someone is going to give you one for free – take it!

2. Spot identity theft early. If someone uses your social security number to get a credit card – then you can spot it early. Even the best credit card companies have a hard time spotting the fraud and you can’t rely on them to protect you fully. You must be proactive in combatting ID theft.

3. Opportunity to raise your credit score – we’ll talk more about your credit score in another post, but it’s important to raise it. There are many things you can do – like keeping balances to a minimum, keeping limits in check, paying on time, not applying for too much credit and more. 

4. Close down those open lines that you haven’t used – these could be loopholes for someone to take advantage of. One time I bought a washer and dryer set as part of a 12 months say as cash deal with no interest. Even after the washer and dryer were paid for – the line of credit stayed open and showed on my credit for years. Someone could have used that line of credit and I probably would never have known it since my address changed twice and I never notified that company.

Pitfalls of the free credit report:

1. Be careful how you obtain it. They will try to sell you something. You’ll probably have to enroll in some kind of trial program for 30 days or something. Don’t signup for this junk – you don’t need it.  So what you need to do is request your report directly – or make sure you cancel the trial offer of credit monitoring or repair ASAP after you get the credit report.

The free annual credit report is a great opportunity to keep your score high and keep your report clean. There are many ways for others to cause problems for you and this is one way to keep on top of that. If you do notice a problem with the report – contact the agency for the proper steps to repair or removal of the item. If you don’t – you might end up with a surprise denial from your next credit card application, mortgage, or car loan!!! How embarrassing would that be? Don’t get caught in that situation – avoid it by getting your credit check.