The information in your credit report can impact your ability to finance a car, rent an apartment and even borrow money for college. The better your credit history, the more likely you’ll be granted credit at a lower cost. Knowing what’s in your credit report — and ensuring that it’s accurate — is an important part of your financial health. Here’s what you need to know.

What’s in a credit report.
Your credit report is a snapshot of your credit history. It contains information about how much debt you have, whether or not you make payments on time and how much credit is available to you. Your credit score is a three-digit number determined by the data in your credit report. When you apply for credit, lenders use your credit report or your credit score to decide whether to grant your credit request and, if so, under what terms. Along with your payment history, your credit report also contains the following information:

Personal information, such as your name, Social Security number, current and past addresses

• A list of the credit and loan accounts you have — and how long you’ve had them
• Your total available credit
• Your total outstanding debt
• New credit applications or recently opened accounts
• Public record information, such as foreclosures, bankruptcy and tax liens

Who looks at your credit.
Typically, your credit is reviewed anytime you apply to borrow money from an institution. So, that may include getting a loan to buy a car, a house or attend school. But there are others who may check your credit as well, like potential landlords, insurance companies, utility companies and prospective employers.

When you should check your credit report.
Financial experts recommend reviewing your credit report at least once a year. However, it’s also a good idea to check it before making a big financial move, like applying for a mortgage, new credit card or auto loan. This gives you time to examine your report for accuracy, correct any errors, and if necessary, take steps to improve your borrowing power. It’s also a good idea to review your credit report any time you notice unusual activity on any of your financial accounts.

How to check your credit report.
You’re entitled to one free copy of your credit report every year from each of the three reporting agencies: Experian, Equifax and Transunion. You can request your free reports at annualcreditreport.com.

Tip: Consider spreading out requests for your free credit report to get one from each agency every four months instead of getting them from all three agencies at the same time.

Once you have your credit report, review your personal information and all account information for accuracy. If you find errors, such as accounts you don’t recognize, check the reporting agency’s website for their process to dispute an error. Correcting information on your report can usually be done online.

Ways to maintain a healthy credit report.
The most important step is continuing to review your report and confirm that all information is correct. Next, be sure to make payments on time and try to keep credit card balances low (most experts recommend keeping balances to no more than 30% of the credit limit). It’s also a good idea to avoid opening several new credit accounts at once.

Fraudulent activity on your accounts can hurt your credit, so it’s also a good idea to keep a close eye on your bank accounts. Check to see if you can sign up for security alerts with your bank to be notified of suspicious behavior. If you notice any unauthorized transactions, contact your bank right away.

A strong credit history is an important step to getting the best borrowing terms in the future — and keeping more money in your pocket. If you have questions about your credit and how it impacts your borrowing eligibility, don’t hesitate to contact your local Commerce Bank branch for more information.

Also See

• Preparing for the Unexpected: How you can protect yourself and your finances
• Financial documents: What to keep and when to toss.