Very few people realize the importance of credit reports and a good credit rating and there are even fewer people who check their credit standing yearly despite the free reports they can get from Equifax, Experian and TransUnion.

For people with bad credit, there are often times reminded by credit advisors to check their credit rating daily. This is the best rule of thumb but there are also cases wherein you should check your credit report.

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1. When you are planning to buy a house, or any property through mortgage, your credit history is the primary document used to base the decision on whether your will be approved or not. Remember that credit history is compiled within a period of seven to ten years so even with an unpaid debt of $1 from five years ago can still affect the lender’s decision.
2. When your application for loans or credit cards is denied, you are entitled by law to get a free copy of your credit history. Make sure that all information on the credit report is accurate and if it isn’t, you should report it immediately to the credit bureau.
3. Because of the use of the internet for shopping, etc, ID theft is now possible. Use your credit report to track purchases made through your account. If you notice some anomalies in the entry, make sure to report it to credit reporting agencies to start a series of investigations.
4. If you have bad credit and are planning to repair your rating, the best place to start is by analyzing your purchases. From there, you can determine whether to cut on buying too much beer or whether you need to be more vigilant with due dates.

Aside from these four mentioned, checking your credit report at least once a year will update you on your financial status. Remember that a good credit score gives you more options when applying for a loan or when purchasing products.