An Experian survey in 2013 found that 49% of Americans check their credit scores at least once a year. While it seems that many understand the importance of checking their credit report regularly, there’s still room for improvement for more than half of Americans.

Why is it Important to Check Your Credit Report?

It is important to know what potential lenders will see on your credit report when they are making a decision to extend you credit or approve your loan. If you have been diligent about keeping an eye on your credit, there is a strong likelihood that you can qualify for favorable loan interest rates. If there is erroneous information on your credit report, it is better to discover it sooner—rather than later.

Your credit report also allows you to better understand your own spending habits. The following checklist can help you better manage your personal finances.

1. Request a copy of your credit report from the three major credit reporting bureaus. Your credit report contains information such as payment history, credit usage, account types, account ages and inquiries.
2. Check your credit report for accuracy. If there is account information, names or Social Security numbers that do not belong to you, it could be a sign of identity theft. Federal law allows you to challenge and dispute what you believe to be inaccuracies. Knowing what is inaccurate can lead to a faster resolution.
3. Put together a budget to help keep your finances in check. This can start with having an open dialogue about money at home. Each family’s approach might be different, but generally, it begins by determining how much money you make compared to how much money you spend. Agree on how the family should spend and save going forward.

Your credit report can be an excellent resource for helping manage your finances. Knowing what is in your credit report gives you the opportunity to make better financial decisions.