Check Your Credit Report Regularly

Review your credit report often to make sure you're on the right path to great credit health. By keeping tabs on your credit report, you can:

Detect signs of fraudulent activity

The best way to know if you are a victim of identity theft is to carefully review your credit report. If you see an account that you did not open, or you see a credit inquiry by a company you are not familiar with, it's possible that someone has gotten a hold of your personal information and using it to apply for lines of credit and loans in your name. Sometimes, victims of identity theft can go months and years without knowing their identity has been stolen. Be proactive in the fight against identity theft and monitor your credit report closely and regularly.

Catch errors in your personal data or account information

Errors on credit reports actually occur quite frequently. Perhaps data was mistyped, or your information was accidentally intertwined with someone else's, or your latest address hasn't been updated yet. No matter the reason, it's important to make sure that your credit report reflects your correct name, address, social insurance number, and account information. An accurate credit report will help to prevent any complications when you go to apply for a mortgage or other loan.  Disputing mistakes on your credit report can take several weeks, so you don't want to leave it until the last minute.

View your credit score to see how you rate in lenders’ eyes

Your credit score is a number that tells lenders how creditworthy you are. It usually ranges on a scale from 350-850. While your credit score is not part of your credit report, it is derived from the information found on your report. Make sure the information on your report accurately reflects your credit history, so that your credit score is calculated based on true data.

You may also want to find out your credit score to see how you rate to a lender. You can purchase your credit scores from TransUnion and Equifax. Note that the scores you receive from the bureaus might not be exactly the same scores that lenders use. This is because each lender usually has its own model for credit scoring, based on the type of loan you are applying for. But the scores you can buy from the bureaus will give you a rough estimate of where you stand.