Eight reasons to regularly review your bank statement

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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 http://ift.tt/RuoMBE.

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, http://ift.tt/RuoMBE.

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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Understanding your bank statement

Your monthly bank account statement gives you a detailed review of the activity in your account for a specific period of time. It is your best opportunity to make sure your records match the bank’s, according to www.bankrate.com.

When your statement arrives, look near the top of it for the starting and ending dates — the period the statement covers. Get your chequebook register and be prepared to match up every debit and credit on the statement with your register.

It is crucial that you review it in a timely fashion because if there are any discrepancies you need to report them to the bank.

Discrepancies with paper cheques don’t have those time restraints, but you should get them resolved speedily too. Another important reason to reconcile your chequebook with the statement is to look for debits you did not make that might indicate an identity thief has gotten access to your account.

Most statements show a summary near the top of the first page. It condenses the status of your account: the beginning and ending balances for the statement period, total deposits, total withdrawals, service fees, etc.

A prominent section of the statement is the transaction description. It details account activity — deposits, withdrawals and fees.

Make note of all fees listed on your bank statement. They may be listed separately, or included in the chronology of your account’s monthly activity.

Common ones are an account maintenance charge, which is a fee you pay for simply having the account, or a nonsufficient funds fee, which slams you if you don’t have enough money to cover a cheque.

Cheque the statement to see how your cheques are listed. It could be chronologically or by date paid or both. Understanding how cheques are listed makes it easier to reconcile the account. Ideally, the bank will list cancelled cheques in a way that is convenient for you and allows you to quickly see whether your current account is in order.

 

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Eight reasons to regularly review your bank statement

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