Credit is the term used to acknowledge the amount taken from another individual or a financial institution. The amount so taken is supposed to be paid back with a certain percentage of interest within a specified period of time. The credit report of a person reflects the ability to pay back the amount along with the interest charged.
There are a number of websites which generate Free Credit Report Annual like www.AnnualCreditReport.com. Here are a few reasons why you should get a credit report.
- Taking a loan
Whenever you take a loan, your creditors always make it a priority to check your credit score. This helps them evaluate whether you will be able to pay the interest or instalments in a timely manner.
- Regular assessment of your free annual credit report
A regular assessment of your credit report through the use of websites like www.AnnualCreditReport.comhelps you analyse whether you have a good credit score or not. A good credit score promises a lot of perks to you the next time you think of taking out a loan.
- Payment of risk premium
Individuals who have a bad credit score rating run the risk of being charged a higher risk premium while individuals who have a better credit score rating earn the benefit of reduced interest rates on loans. The lower rates of interest help to save a lot of money in the long run.
- A check on fraudulent activities
With the rise in the number of cases of fraudulent activities like identity theft, people should be aware of their credit ratings. Being aware of one’s credit rating enables them to ensure that no unauthorized loans or expenditure is undertaken by someone who is utilizing the identity of someone else. To ensure that this does not hamper your credit score, make sure all your debtors have been paid and they have subsequently cleared you of all debts.