Annual Credit Report:

Is Monitoring Your Credit Report Once a Year Enough?


Manage Your CreditIs it a good idea to review your personal credit report once a year? The answer to this question depends partially on how you choose to review your annual credit report. By law, you're eligible to receive one free credit report per year from each of the major credit bureaus, TransUnion, Experian, and Equifax. You shouldn't request all three credit reports at the same time, however. In most cases, checking your personal credit report only once a year is ill-advised, especially when the number of identity theft cases continues to rise every year, putting everyone at greater risk of fraud or theft.

However, if you've regularly applied for one free annual credit report every four months or so from each of the major credit bureaus, and you've been diligent about monitoring your credit, you can probably get away with checking your credit less often. How often you should request a free annual credit report is determined by how good your credit is and how proactive you are about your personal finances. Ultimately, how often you receive your annual credit report from each of the three credit bureaus is a matter of personal preference, but you're probably better off if you check your credit on a regular basis. Here's why:

Identity theft

Right now, you have a one-in-10 chance of becoming a victim of identity theft. To some, those might look like long odds. But the fact that you have a 10-percent chance in a country of approximately 300 million to deal with the profound personal and financial pain of identity theft illustrates just how severe this problem is. The best defense against identity theft is a good offense. Be vigilant about protecting your personal information, and review your personal credit report on a regular basis.

Errors in your annual credit report

Between human error, automated billing software, and the sheer volume of transactions occurring each day, it's very likely that you'll eventually have to deal with an error on your personal credit report. These errors aren't uncommon, and the credit bureaus have protocols in place to make the process of disputing an error fairly painless.

Major purchases

The majority of us use credit to make large purchases such as homes, vehicles, furniture, and other big-ticket items. In doing so, we're essentially paying for the convenience of using someone else's money. Before you take on a large financial commitment of any kind, it's definitely in your best interests to obtain a copy of your annual credit report. Reviewing your personal credit report will allow you to correct any errors, including errors that could cost you many thousands of dollars over the length of the loan.

 

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