Monitoring is the best way to make sure erroneous information doesn’t negatively affect your credit score.

Regularly checking your credit report is always a good idea. Now with the coronavirus pandemic, it’s even more important because of erroneous reporting by some lenders and the devious acts of fraudsters. Here’s what we’ve discovered and how you can check your credit score for free.

1.) Your credit score affects the cost of borrowing, plus a lot more

Your credit score is a financial snapshot that shows your debts and repayment record as reported by your creditors.

The higher your credit score, the less risk lenders perceive when extending credit to you. In practical terms, a higher credit score means access to lower interest rates, lower down payments and more attractive repayment terms.

If your credit score is low, you’ll likely be charged higher interest rates whether you’re applying for a home, auto or personal loan, or a credit card.

Credit scores are used for non-financial decisions as well. Until recently, Michigan auto insurers were allowed to use credit scores to determine premiums but legislation has banned the practice. However, insurers can still use credit information or insurance scores.

Also, many employers run a credit check on everyone they intend to hire. A poor credit score could cost you a job.

2.) Erroneous reports during the pandemic

Some consumers who have taken advantage of financial aid during the coronavirus pandemic have had their credit score dinged by lenders who report information in error.

The CARES act says borrowers who requested mortgage forbearance or suspension of student loans for reasons related to the pandemic should not have their credit negatively affected. However, Consumers Reports details how some lenders have made mistakes that have damaged credit scores for many people.

In some cases, people who merely inquired about forbearance were reported as receiving forbearance, even though they didn’t take advantage of the financial aid.

Check your credit report to make sure that errors haven’t been made. In general, information stays in your record for seven years and this could affect your ability to get a loan, land a job or rent an apartment.

3.) Scammers can ruin your good credit

While banks and credit card companies are watching out for fraud, some scammers still get a hold of personal information and run up other people’s bills. If fraud is committed with your credit card, your liability is limited but you still have to untangle the mess of fraudulent charges. If your identity is stolen, a fraudster could wreak lasting damage to your credit score and your personal life.

Check your credit report regularly to be sure no fraudulent credit cards or other accounts have been opened in your name.

How to get your credit report

You’re always entitled to an annual free credit report from the three major credit bureaus—Equifax, Experian and TransUnion. Because of the errors and fraud associated with the pandemic, you can request a free credit report each week through April 2021. Get your reports at annualcreditreport.com.

You can improve your credit score

If you don’t like your credit score, Consumers @Work Manager Scott Dobson, says, “In 12 months you can have a completely different credit score just by taking action and being a little bit in control of your finances.”

To learn exactly how, listen to our Money, I’m Home podcast on credit scores. Also, you can take advantage of the Consumers Credit Smart Program and credit counseling services to help you build or improve your credit score.

Consumers provides banking services for more than 100,000 members. If you have banking questions, call us at 800-991-2221. We make it easy to bank how you want, when you want.

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