Why You Need to Check Your Credit Report Each Year {and How}

Do you have any idea of where your credit currently stands? Is your credit score good, bad, poor, or even terrible?

The truth is you'll never really know unless you're checking it. People often assume that just because they're making payments on time and keeping their debt low means they'll have perfect credit.

Unfortunately, this isn't always true. Let's take a closer look at why you need to check your credit report each year and how you can do it.

Why Do You Need to Check Your Credit Report Each Year?

There are a number of reasons to check your credit report each year.

First of all, it's important to know what's on your credit report. You want to make sure the information is accurate. For example, you may find that you paid off a debt, but the creditor never updated your account. You may even find that there's an account you never opened on your report. This is when you'll need to contact the credit report agency to dispute the information.

Another reason you want to check your credit report each year is to know where you stand when it comes to creditors. For example, if you're thinking about buying a house, you'll want to know what your credit report looks like. If your credit isn't exactly where it should be, you can work to improve the score before you apply for a mortgage.

How Can You Check Your Credit Report Each Year?

Guess what. You don't have to pay for your credit report. You can go to the website AnnualCreditReport.com and follow the directions to get your credit report from all three credit reporting agencies for free.

It's extremely easy to do and even gives you step-by-step instructions for disputing incorrect information. If you what to know your score, you can use the company Credit Karma to monitor your score for free. There's no charge to use either of these methods. Credit Karma will even keep you updated of any changes on your credit report for free.

Even if you have immaculate credit, you still need to check your credit report each year. This will allow you to dispute wrong information, know where you stand with creditors, and give you peace of mind that everything on your report is correct.

What are you waiting for? You can check your credit report and score for free, right now.