How Often Should I Pull My Credit Report?
There has been a lot of press, here and elsewhere, about how people can now pull their credit reports annually for free. However, is once a year really enough to fully monitor your credit for problems and potential identity theft?
Identity theft is a relatively new term in our vocabulary. The truth is, according to the Identity Theft Resource Center, identity theft is the nation’s fastest growing crime. Incidents of identity theft victimization have increased 11-20% between 2001-2002 and 80% between 2002-2003. Not only is identity theft on the rise, but it can take over 600 hours and over $1400 of your time and money to recover from an incident!
Given the rise in identity theft, it is also important not to take this information and go off in a panic. In Money Magazine’s October 2005 issue, the article Fear Factor identified seven common financial fears. Number six was identity theft. The truth of the matter is more common than identity theft ruining your credit rating is mistakes on your credit report ruining your credit rating. To quote from the article itself:
A 2003 Federal Reserve study of 250,000 credit reports found that 70% contained mistakes. A 2004 U.S. Public Interest Research Group analysis of 200 reports found that 79% had mistakes and 25% contained serious errors, such as false delinquencies or accounts that didn’t belong to the consumers, that could result in a denial of credit.
The Identity Theft Resource Center recommends you pull your credit report from all three credit reporting agencies once a year. Further research with Liz Pulliam Weston at MSN Money Central indicates you should pull your credit report at least once a year.
The question remains, do you need to pull your report more than once a year? No single source is terribly clear on this. However, the answer is probably not. Check your report annually, review it, and if there are any errors, make sure you file with the credit reporting agency within the 30-day deadline.
Now, here is the caveat to the previous statement. If you feel you may be at risk for identity theft or you may have had problems in your past, it would probably be a good idea to pull your report at least every 6-months to make sure things are in the clear. There are also services, such as Experian’s credit monitoring, which will alert you to any change in your credit report. Since a service such as Experian’s can cost $9.95 per month (that’s $119.40 per year), this is something you would probably only need if you are considered at a high risk for identity theft.
Since pulling a credit report more than once a year can cost some money, here is a tip. Given there are three credit reporting agencies and you are allowed your free credit report from each of them once a year, spread out your requests. If you spread out your requests, you can get a single report from each agency every four months. Think of it this way. Request Experian in January, Transunion in May and Equifax in September. Four months later, it’s January again, and you can request from Experian. This will break up your reporting and allow you to monitor your credit report throughout the year.
There are also many simple things you can do besides monitoring your credit report to help deter identity theft. First, you can be careful. Shred those credit card statements and other items which contain information a potential thief could use to steal your identity. A decent paper shredder shouldn’t cost you more than $50. If you’re going to be away for any length of time, either have a neighbor you trust collect your mail daily or have the post office hold it until you return. Keep your credit cards on your person or shred the ones you no longer are using but are keeping open for the history. Don’t give out your Social Security Number. If a telemarketer or someone identifying themselves as a collection agency asks you for your information over the phone, tell them to send it to you a proper form in the mail, in writing. Once you receive the information, you can then call back yourself and find out if they are legitimate or not. Finally, remove yourself from marketing lists and join the National Do-Not-Call Registry.
Again, it’s important not to panic and to simply protect yourself. Pulling your credit report annually is a great first step.
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