Your credit report houses all the important information regarding your credit history. If you plan to apply for a loan, its contents can make or break the deal.
Although many know the significance of a good credit score, most people almost always fail to check it. Due to our busy and hectic life, a credit score is often the last thing to cross our minds. After all, it’s not part of those “in your face” figures like your credit card balance or your checking account.
Not checking your credit score may lead to issues and other inconveniences. Hence, being in the loop about it can save you from unwanted problems. Regularly checking on your credit score can also help you secure a job, save money on insurance, and help you buy a house in case you’re planning to have one.
So, when was the last time you actually check your credit report?
If it’s already more than a year, then you need to order one now. Checking it every few years or going without checking your credit score is a bad practice. You need to check your credit score regularly.
Here are the reasons why:
It Will Inform You the Current Standing of Your Credit
A credit score is a vital aspect to your overall financial health. As such, not paying attention to it could be detrimental.
Whether it’s bad or good, you must be aware of where your credit score stands than to have no idea at all. It’s true, especially if you are planning on getting a loan.
If you have a good credit score, you can focus on maintaining it. If it’s bad, there are steps you can take to improve it.
It Will Keep Your Credit Score In Good Standing
You just can’t sit and do nothing while your credit score plummets. But you wouldn’t even know an issue exists if you’re not checking it in the first place.
It will be impossible to get your credit score ready within a couple of days, especially if you have an application coming up. It will take months, even years, to establish a good credit history.
With that said, make sure to monitor your credit score. It will allow you to be in control of your credit.
It Will Make Sure Your Credit Information is Correct
A regular credit score check-up can ensure the accuracy of your credit information. It will help you evaluate the credit report and spot for possible inaccuracies.
For instance, if your credit score is lower than what you’ve expected, it could be an indication that your credit report has errors. If so, you need to dispute with the credit bureaus.
It Gives You Possible Outcomes for Your Loan Application
It’s crucial that you know your credit score’s health when applying for a loan. Lending platforms will evaluate it to assess your qualification.
If you don’t check your score prior to loan application, you might get blindsided by terms or denials that are less favorable than your expectations. But, if you know where your credit stands, it will set you for the possible results, even the undesirable ones.
It Will Give Insights About What Actions are Good and Bad for Your Credit Score
You can tell how your financial actions affect your credit just by monitoring your credit score.
For example, you’ll see how opening a new credit card or how paying off a balance will affect your credit. You’ll know what to do before a major loan application once you know how particular actions can affect your credit score.
It Will Help You Respond to Changes
Another advantage of checking your credit report is that it notifies you right away about the changes in your credit score.
In case your credit score drops, you can use the information in your credit report to find out what caused the change. You can then take action to reclaim your lost credit score points.
It Notifies You for Possible Credit Card Offers
You’ll have a better chance of qualifying for credit cards with better interest rates, terms, rewards or other perks once your credit score improves. You can also use a healthy credit score as a bargain for requesting your present credit card issuers to minimize your interest rates.
If the credit card issuer does not agree to prune your interest rate, you may apply for a 0% balance transfer credit card. A healthier credit score will boost your likelihood of qualifying.
See Also: 9 Valuable Credit Card Perks
How Often Should You Monitor Your Credit Score?
The changes in your credit score depend heavily on how often your credit report’s information changes.
There are online platforms you can use to check for updates in your credit score. For instance, checking your credit score more often will help you be prepared in case you’re planning to buy a car or a house soon. Otherwise, monthly or semi-annual monitoring will be enough.
Put in mind that your credit score is a reflection of your credit report’s information for a given timeline. To change it, you need to change the existing information on the credit report too with a good payment and spending habits.
Credit score providers will give you the details about the factors affecting your credit score. You can use it to figure out what to do to enhance your score.
It’s important that you examine each line of information found in your credit report. Make sure that your payment statuses and account balances are accurate. You can never be too informed or too careful when it comes to your credit profile. That being said, check your credit score at least once or twice a year.
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Author: Tiffany Wagner
Tiffany Wagner is a freelance writer for various publications and websites like Credit Ninja Loans. Her forte circles to just about anything related to finance, real estate, and marketing. Besides being a wordsmith, Tiffany is also a backpacker and travels to different countries whenever her time permits.