If you are not in the habit of reviewing your bank statements regularly, this piece will make you change your mind.
What is a bank statement, aside from a piece of paper showing how
much money you have? In short, it is a snapshot of your banking activity
during a specific time frame, typically a month, according to
www.gobankingrates.com.
Most banks send a copy of your bank statement by mail or through
online paperless statements for review each month — and many people
don’t pay attention to theirs.
Here are eight reasons why you should start reviewing your bank
statement each month and stop ignoring it now.
1. Applying for a mortgage loan: When you are
applying for a mortgage, you will have to submit a copy of your bank
statement to verify your income. Mortgage lenders take your income and
credit score into consideration when determining whether to approve you
for a loan and what interest rate you will get.
Your bank statements show how much income you have, how stable it
is and where it comes from. All this information will give lenders a
good idea of what kind of borrower you are.
2. Filing your taxes: If you claim itemised
deductions on your taxes, you need a record of how much you spent and on
what. If you don’t have itemised receipts for every purchase, your bank
statements and credit card statements can serve as backup. You don’t
need to submit receipts or bank statements when you file, but if you get
audited, you’ll be happy you have them.
3. Disputing a credit report: It is your
responsibility to fix any errors on your credit report. To dispute a
credit report error, you will have to contact the credit reporting
bureaus and your creditor — and provide details about the error. To
support your claim, you might need to provide copies of your bank
statement, which would show payments that perhaps were not reported.
4. Applying for a car loan: Whether you are
applying for dealer financing or a car loan through a third-party
lender, you will need to provide proof of income. Although your recent
pay stub is an option, your bank statement can also prove you have
sufficient, steady income. If you are self-employed and applying for a
car loan, a lender might require you to provide three months’ worth of
bank statements.
5. Creating a budget: One of the best things you
can do for your financial future is to create a budget and stick to it.
Referring to your bank statement to see your spending history can help
you plan and track your budget.
6. Qualifying for medical programme: Government
programmes especially in developed countries offer medical coverage for
disabled, elderly and low-income individuals. This idea is being
introduced in Nigeria as well. Because this is an income-based
programme, there are limits on how much you can earn and remain eligible
for coverage. To qualify for this coverage, you will need to submit
your bank statements.
7. Filing for divorce: When you file for divorce,
you must turn over documentation that lists your shared and individual
assets. Couples often have disputes over assets during divorce
proceedings; your bank statement is a good way to show your current
financial status.
8. Refuting a transaction: If you don’t review
your bank statements you might not notice unauthorised charges or
transactions — and you could end up paying for them. For instance, you
could see a cheque that was cashed on your account that you don’t
remember writing. Should that happen, your bank statement would show the
cheque image with your signature on it, which could serve as proof of
fraud if it is a false signature.
Although your bank statement might seem like an unnecessary piece
of paper — or virtual document — it can be useful in many situations.
Not only can it help you make sure your account balance and transactions
are accurate, it can serve as proof of income, so carefully review
yours every month. If you don’t know how to get a bank statement,
contact your financial institution for help.
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