Credit Reports aren’t just for approve loans anymore!

It’s very important to check your credit reports at least once a year. The information in these reports are used in calculating your credit score which in turn is used by banks to approve loans and set your interest rate on loans and credit cards.

There are three main companies that each compile data into three different credit reports. Incorrect information has been known to end up on credit reports. You don’t want some wrong data causing you to pay more for a car loan or mortgage in the form of a higher interest rate. So be sure to check all three credit agency reports annually.

In many states insurance companies are now permitted to pull your credit reports and use that in determining the rates you will pay. This is somewhat controversial and many people have complained. The fact of the matter is that insurance companies have been able to prove to state regulators that there is a correlation between credit scores and insurance claims. So not only will a late payment on your credit card cause your interest rate to rise and late fees to be added to your account, you just may end up paying more for your car insurance.

The use of credit reports in determining consumer rates are most likely only going to increase in the future. So be vigilant about checking your credit reports regularly.