Between paying bills, monitoring investments and watching over the monthly budget, it’s normal to feel overwhelmed by money-related responsibilities. This leads many of us to put off until tomorrow certain financial tasks we should be doing today.
For example, a lot of folks don’t feel any urgency to check their free annual credit reports. But there are some situations where it just can’t wait. Here are five signs you should check your credit report today:
1. You’ve never checked your credit reports before
By law, you’re entitled to see your credit reports — one from each of the three major credit bureaus: TransUnion, Equifax and Experian — once per year at no cost through AnnualCreditReport.com. You can monitor your credit with free credit report information, updated weekly, from NerdWallet. Today is the day to take advantage of this freebie if you’ve never done so, because reviewing your reports is the best way to catch potentially costly mistakes.
2. It’s been over a year since you last reviewed your reports
Checking your credit reports is smart, but once is certainly not enough, contrary to what many Americans seem to believe. Only 34% of U.S. adults have ordered a copy of a credit report in the past 12 months, according to the National Foundation for Credit Counseling’s 2015 Financial Literacy Survey.
If you’re among the other 66%, there’s no time like the present to check this off your to-do list. Since most lenders report account information on a monthly basis, you should review your reports at least once per year to be sure an error hasn’t landed on one of them.
3. You plan on applying for a mortgage
Getting a home loan requires a rigorous application process, including a careful review of your credit by the prospective lender. Checking credit reports before you submit your application can give you a sense of your chances of getting approved and what your interest rates might look like.
“One of the first steps to prepare for the homebuying and mortgage process is to know your credit profile,” says Arlene Maloney, senior vice president and division sales manager at Wells Fargo Home Mortgage.
Your report can help you think more realistically about what homes you can afford. “Your credit history may impact the interest rate or the amount of money you can borrow in relation to your income,” Maloney says. If you pull your credit report and find that it has some black marks, you’ll be able to adjust your borrowing — and house hunting — expectations accordingly.
4. Your credit score drops unexpectedly
VantageScores are widely available for free online, and you can also get FICO scores for free from Discover. If you view your score and notice a big, unexpected drop, it’s important to do some investigating — pronto.
“Your credit and identity go hand in hand,” says FICO spokesman Jeff Scott. “It is common for victims of identity theft to see their FICO scores drop unexpectedly due to unauthorized use of their accounts. People who believe they have been targeted by identity thieves may want to check their credit reports for indications of fraudulent transactions.”
5. You’re denied a loan, insurance policy or job because of your credit
You should receive an “adverse action” notice from a bank or business that’s denied you a loan or any other financial product because of your credit. The notice should include, among other things, a free credit report from the credit bureau used in the application process. You must request the report within 60 days of receiving the notice.
A copy of your credit report can provide insight into why you were rejected and help you figure out how to change your financial habits to improve your credit score. If you handle your finances responsibly, the denial might come as a surprise and could be an indication of fraud or a credit reporting error. In any case, your credit report can empower you to identify and remedy the problem, ensuring a different outcome the next time you apply.
This article was originally published on U.S. News & World Report.
This article was updated Aug. 5, 2016. It originally published May 19, 2015.