Did you know that the Fair Credit Reporting Act allows you to get your credit report for free once a year from the three largest credit bureaus – Equifax, Experian, and TransUnion? Maybe you’re aware of this benefit or maybe you’re not.

According to a study by the Consumer Financial Protection Bureau (CFPB) only about 15.9 million people actually receive a free credit report from one or more of these agencies. That means about 90% of the people that are eligible to receive their credit report don’t take advantage of this free benefit. So what type of credit checker are you? Do you check your credit reports frequently, occasionally or never?

Active Checker

An active checker looks at their credit reports at least once a year or more frequently. These people are more financially savvy and know that their credit is important. And they understand how their credit can impact their ability to get a loan for a new home or a refinance.

Some reasons why they check their credit more frequently are:

• They want to spot errors on their credit report, so they can get them corrected as soon as possible.
• They want to make sure they haven’t been a victim of identity theft or other types of fraud.
• They want to see if their good financial behaviors have improved their credit scores.

Former Checker

A former checker is someone who has looked at their credit reports in the past, but they may not be actively checking their scores now. Motivations behind former checkers’ behavior include:

• They feel they don’t need to know their score, because they’re not planning any big purchases. Or, they generally buy with cash instead of credit.
• They don’t expect any changes in their credit reports and scores.
• They don’t think their financial situation will improve. They believe they won’t receive favorable credit terms if they do apply.
• They’ve checked their credit in the past and they didn’t like the process because it was confusing or difficult to understand.

Non-checker

Non-checkers have never checked their credit. Often, they’re younger adults. They have lower incomes. They have fewer financial accounts and/or credit cards. Or they rent versus owning a home. The reasons why they don’t check their credit are:

• They simply don’t see the need to check it.
• They’re afraid their personal information will be stolen if they give it out.
• They’re afraid they’ll be forced into buying products they don’t want, like a credit-monitoring service.
• They want to avoid the pain, embarrassment or shame of their financial situation.
• They feel powerless in improving their credit scores.

Regardless of what type of credit checker you are, it’s important to know that while lenders do look at your credit score to help them decide whether to lend you money or not, every lender has their own criteria they use in determining who they will loan money to. So if you’re looking to purchase a new home or refinance an existing one, contact the mortgage specialists at Grandview Lending. They can review your credit scores and help you find the best mortgage solution based on your credit history and your needs.

 

Photo credit: iStockphoto / almagami