I greatly dislike debt. If you've been reading my work, you probably already know that. In general, I am not in favor of taking on a loan. That being said, there are a few situations in life where you may not be in a position to pay cash for something that you need: cars and houses come to mind. While we can debate forever whether or not you should take a loan for these things, or whether you really need them or not, the truth is that you are going probably going to get a loan when you decide you want to purchase one of them. That is, assuming someone will give you a loan... There I said it. Yes, it is possible that someone might not want to give you a loan, and if they do want to give you a loan, what kind of rate will they qualify you for? Much of this depends on your credit report.
Your credit report is basically a report that tells a lender about your relationship with debt. Although having no debt might be great, let's look at it from a lender's perspective. Do you think they really want to lend money to someone that doesn't have a proven track record of paying back? Lenders use your credit report to judge you and whether or not you are able to manage your debts responsibly. Lenders DO want to lend you money, because that is how they make money. Equally, lenders want to make sure you are responsible enough to pay them back. So, if you think you might want to take a loan in the future, you need to take the first step.
You need to pull your own credit report. Many people avoid doing this out of fear. I get it. I still get a little nervous every time. That being said, you cannot correct any errors if you don't find them. You also don't want to find errors in the moment you are applying for a loan.
There are three main credit reporting agencies: Equifax, Transunion, and Experian. You are entitled to getting a free credit report from each of them every year, but you have to request it. You can do so by going to www.annualcreditreport.com. As I said before, the report will be free. If you want know your credit rating (the number), you will be charged for it. This is pretty much standard.
A lot of people get very credit concerned (understandably so), and want to sign up for credit monitoring services. If you haven't ever had a problem, you could very easily skip the fees and monitor your credit on your own. Each of the three agencies will give you one report per year for free. No one says you have to order them all at once, even though most people do. I generally order one at a time. I order one just after the holidays and mark down the date, and which company on my calendar. Four months later, I order another (from a different agency), and so forth. As long as everything continues to look right, I can monitor my own in this way for free.
If you feel that you've been compromised in some way, there are steps that you can take as well.
For further reading:
So, your social security number may have been compromised....
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