The credit report has become a very important piece of personal information for the majority of adults in the United States. The credit report and your credit rating are used by a wide variety of individuals to determine your level of responsibility and credit worthiness. There are several reasons why every individual should check their credit report regularly but three of the reasons stand out the most.

The first major reason that an individual should check their credit report regularly is to ensure that they have not been a victim of identity theft in recent months. The number of cases of identity theft that occur across the nation annually have increased dramatically over the last decade, partially due to the increased popularity of purchasing items and giving sensitive information over the internet. There are many different ways that your credit card information or identity can be stolen by thieves and the theft of this information can be financially devastating to the individuals that it happens to.

In order to determine whether you have been a victim of identity theft, your credit report should be reviewed carefully for any accounts that you do not recall opening or unpaid bills on your account that you do not remember. If there are any discrepancies on the credit report that are noticed, you should contact the creditor and the credit bureau immediately to alert them to the issue. The faster the items are found, the faster action can be taken to close the account and limit the amount of damage that is done in your name.

Another reason that individuals should check their credit report on a regular basis is because creditors often make mistakes when it comes to reporting to the three major credit bureaus. As much as we would like the credit reporting system to be accurate and foolproof, the truth is that the information that is submitted to the credit bureaus can be incorrect information about the individual's account. The negative information that may be found to be incorrect may include credit limits, late payments, missed payments, account balances, and charged off payments.

By law, if a credit bureau is informed about an inaccuracy on a credit report they are required to investigate and provide a correction of the information, if warranted. The credit bureau will have to be notified of the discrepancy in writing with all relevant information that you may have about the account or purchase included so that they will have the information available for review. After they have reviewed the information and obtained the information that they need from the creditor that has reported your account to the credit bureau, they will inform you of their decision regarding your account in writing by mail.

The last major reason that you should review your credit report on a regular basis is so that you know your credit-worthiness before applying for additional credit products or make major purchases, such as a car or a boat, that may require financing. Knowing how good your credit is before allowing someone else to pull your credit report will ensure that you will not get any unpleasant surprises or get taken advantage of by unscrupulous salespeople. Reviewing your credit report to determine your credit rating before making a major purchase also ensures that you are not wasting your time shopping for an item that you will not qualify to purchase.