Checking credit reports can prevent problems, yet many people have never seen them
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A new report finds many Americans have never seen their credit reports.
Legally, they are entitled to one free report from each of the three credit bureaus per year. Experts say checking the reports every year can prevent problems.
Scott Shambagh said he's very diligent about keeping on top of his credit. He checks it monthly.
"It dictates the pricing for all sorts of things — cars, mortgage loans, credit cards," he said.
Yet, a Bankrate.com survey of working adults shows there's very little enthusiasm for checking credit reports. Thirty-five percent of respondents said they have never checked their credit at all.
Bankrate's Jeanine Skowronski chalks some of that up to life issues. She says senior citizens and millennials are the least likely to check their credit.
And, of the consumers who do pull their own reports, 14 percent said they go more than a year without looking at their reports.
"People think their credit scores and their credit reports are only important when it comes time to apply for a loan, and that's not true," she said. "You should really be looking at these things all year round."
Skowronski said mistakes are fairly common. A recent Consumer Reports study found of those people who do check their reports, about one in five will find errors that could lower their credit scores.
"You don't want to unnecessarily be dinging your score and hurting yourself for no reason," she pointed out.
Mistakes can lead to losing out on a job or an apartment. They can also mean paying thousands of dollars extra to get a loan.
Let's say you take out a $200,000, 30-year fixed mortgage. Then your credit drops from an "excellent" 780 to an "OK" 680. Those 100 points will cost you over $16,000 more over the loan's life.
Even people who have great credit should check their reports for fraud.
"I don't really care about the number, other than to make sure it's good," said resident Marley Lunt. "I just want to make sure no one else is messing with my credit, so that's why I check it."
Skowronski explained, "You really want to make sure that you go on there and that you see, have people been taking loans out in my name? Do I have weird personal information on here? Especially with all the data breaches over the last couple of years, it's even more incentive to be checking regularly."
You can order a free copy of your credit report from each of the three credit bureaus through Annualcreditreport.com.
It takes about 15 minutes to submit the request because it includes many security questions. If there's a dispute, there are instructions on how to handle it.
