Mistakes on credit reports can be
costly, and not only when shopping for a mortgage.
Our latest national poll reveals that 32 percent of
Americans surveyed say they never check their credit
reports, meaning they have no idea whether the information
on their reports is correct. Considering the fact
that reports often contain inaccuracies, there’s a
large chance that tens of millions of Americans are
throwing money away needlessly each month.
Information contained in credit reports
is the base off of which credit scores are compiled,
and the financial repercussions of having a less-than-ideal
score are far-reaching: The blissfully unaware might
be paying too much for auto or home insurance and
carrying credit card balances, among other things.
They may even miss out on job opportunities or housing
because of mistakes.
"There
are lots of ways to be unpleasantly surprised. The
point is you don't know until you look."
"If you don't check you have no
idea there's an issue until something unpleasant happens
to you," says professor Michael Staten, director
of the Financial Services Research Program at George
Washington University. "And with rates, you may
never know if you're paying too much."
Not checking your credit reports makes
it impossible to know if your credit score, which
is comprised of information from your credit reports,
is fair. When uninformed consumers take out loans,
they pay for the mistakes on their reports.
"Without knowing what's in their
credit report, consumers are flying blind in terms
of what to expect anytime they go out and apply for
credit. This is especially important now with the
shift to risk-based pricing," says Staten.
"Now you don't get turned down for credit, you just get charged more."
Credit mistakes
cost everyone
Even if you don't think of yourself as someone who
uses credit, your credit score can affect the rate
on your auto insurance and sneak up on you in
other ways, impacting cell phone policies and apartment
rental agreements.
"There are lots of ways to be unpleasantly
surprised. You could discover identity theft. The
point is you don't know until you look," says
Staten.
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