Even if you aren't planning to purchase a home in the near future, it's wise to check your credit report regularly.
If you ARE planning to buy a house, or even a car, it's doubly important. Your credit scores will influence the interest rate you're offered when you make that purchase. Naturally, you want the highest scores possible in order to get the lowest interest rate possible.
Paying every bill on time throughout your entire life won't guarantee that your scores are as high as they could be. For example:
- If you use your credit cards, you could be losing points because too much of your revolving balance is on just one card.
- If you don't have any credit cards, you are probably losing points for not having enough credit to demonstrate your payment habits.
Bother of these problems can be cured with a few adjustments, but there are other problems that can take longer to solve, even though you didn't cause them.
I'm talking about mistakes. Humans make errors. Even Fair Isaac says that as many as 70% of all credit reports have some kind of error. Some aren't important, but others can hurt you.
Somewhere between your credit accounts and the credit bureaus, there may have been a data entry error, such as transposed numbers or a typo in your name or address. Someone may have failed to report a pay-off when you traded in a car or refinanced your current home.
You could find that your credit report shows accounts that aren't even yours. That's a huge red flag that needs to be investigated immediately. It could be a simple data entry error, and it could be that you've become the victim of identity theft.
If a criminal opens a new credit card account in your name but with a different mailing address, "you" could be racking up a huge debt without even knowing it.
A few years ago, checking your own credit was costly. Today there are numerous choices that give you free access to your credit report any time you want to see it. So take advantage of that - check your credit report regularly.