Credit reports should be accurate, and it is very important to make sure that they are. Errors or outdated information on credit reports often result in you being charged higher interest rates. The higher the interest rate, the more money you will have to pay back over the life of the loan, resulting in a diminished ability to build savings.

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Another reason a yearly review is important is identity theft, which occurs when someone steals another person's identity to obtain credit, secure loans and mortgages, establish utility accounts, and so on. If you were to become a victim of this type of fraud, it could appear that you have opened accounts and never paid for them, seriously damaging your credit history. Identity theft has become increasingly common over the past several years and has cost both the lending community and consumers nationwide billions of dollars. By reviewing their reports, consumers can detect inaccurate information and identity theft, thereby ensuring that anyone who is legally entitled to review their reports sees an accurate depiction of their credit history.