The risks of not reviewing your credit reports each month

Under the Fair Credit Reporting Act, consumers have the right to obtain a free copy of their credit report from each of the three major credit bureaus (Experian, Equifax, and TransUnion) once every 12 months. But, this shouldn’t be the only time that you’re reviewing your credit reports.


Inaccurate information in your credit reports not only directly affects your credit score. The price that you pay for credit could be affected. This means that you could pay higher interest rates without even knowing it. You could also be denied credit or service because of information in your credit reports. So, it’s highly risky to go 12 months without checking your credit reports. Even checking your credit just every six months or quarterly is not enough.


Though there are credit monitoring services that you can sign up for to alert you of potential fraud, there’s still the very likely chance that inaccuracies in your credit reports are due to mistakes made by the credit bureaus or your creditors.


Here are some common mistakes that you might notice on your credit reports:

  • Payment not reported
  • Soft inquiry coded as a hard inquiry
  • Remark added to your credit report without your permission
  • Credit limit increase not reflected on your credit report
  • Incorrect address or other personal info added to your credit report


It’s possible and very likely that Experian, Equifax, and TransUnion all have different information on file for you for a single tradeline. For instance, it’s not uncommon for your credit card payment to be reported to one, but not all of the bureaus in any given month. That’s why it’s important to check your credit file at each of the three major credit reporting bureaus.


As to why errors occur on credit reports, it may be hard to ascertain who’s to blame. In all likelihood, your creditor will say that they submit updates to the bureaus each month and that it’s up to the bureaus to update your file. Undoubtedly, the credit bureau will shift the blame to your creditor and claim that your creditor never provided the updated info because if they had, the bureau would have updated your file.


This is yet another reason that you should not go more than a month without reviewing your credit report. It will be much easier to get corrections made to your report when the error is recent. Conversely, if you wait one year to contact credit bureaus or your creditor about an error, not only may it be more time consuming as both you and your creditor may have to sort through records for documentation, you would have already been affected by the damage for the amount of time that you waited. 


Like most people, your ultimate goal might be to have a healthy credit history and good credit scores. So, reviewing your credit reports should not just be a matter of uncovering inaccuracies. You should monitor your credit reports to help you track your credit journey and ensure that you’re meeting your credit goals.


After you conduct an initial full review of your credit reports, continuing the process of reviewing your credit reports each month should take just two to five minutes. Regularly monitoring your credit reports is a quick process that can literally save you time and money that would otherwise be spent making corrections or paying more for credit due to inaccuracies. It can also be fun and motivational to track your progress and see how your healthy financial habits are paying off. 


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