Sunday, November 18, 2012

3 Reasons You Should Check Your Credit Score Often

Your credit score says a lot about your financial health. In the same way that you monitor your weight during a weight loss/gain program, you need to constantly check this figure to make sure your finances are in good shape.

There are many reasons why your credit score should be monitored and that is what we will be discussing in this article.

A lot of people find themselves in deep financial trouble nowadays. Though most of them can blame the bad state of the economy, a deeper probe will reveal that things would not be so dire if they only took time to monitor their credit score.

Most people think that they should only look at their credit score when they want to borrow money. While it is true that your credit score will play an important role in a loan approval, that is not the only reason to look at your credit.

One of the rising reasons to monitor your credit score is to prevent identity theft. This crime is done so people can steal from you by borrowing under your name. If you do not keep tabs on your credit report, it may take years before you realize that your credit history had been damaged by a loan that you did not make.

Another reason to keep tabs on your credit score is the fact that it will take quite some time to repair it. Sometimes, we think that paying the minimum of your credit card bill and missing out on a couple of loan payments will not harm us. On the contrary, your credit score may have been slipping lower and lower every time. In case you have to borrow money or you decide to buy a home, you need a healthy score to get an approval. If you find that your score is low because of your negligence, then you can start repairing it as soon as possible.

The last reason why you should constantly monitor your credit score is to check it for any errors. Incorrect information can drive your credit down and you need to see if there are erroneous late payments being inputted in your report. This will be reflected in your history unless you dispute that particular information. Filing a dispute to correct an error is one of your rights as a consumer. Do not be afraid to utilize it.

Remember that lenders are not the only ones interested in your credit history. Some employers take a peek as well and even landlords access this before getting a tenant. If you do want the inconvenience of being turned down by any of them, you should make sure your credit will not negate your ability to pay your dues or manage your finances wisely.

Monitoring your credit score will not cost you a lot. The government mandates the 3 major credit bureaus (TransUnion, Experian and Equifax) to provide consumers with a free copy of their report once a year. This can be accessed through the Annual Credit Report website.

The technique is to download one report from a chosen bureau every 4 months. This will provide you with a free report all throughout the year. You can use one of the many free online credit score calculator based on the information written on your report. Compute and monitor the details and make sure that any additions are based on your own actions.

Your credit score is also one of the factors that will be checked to see if you qualify for a debt relief program. If you have some debts to settle, make sure your score can allow you to pursue the debt relief option that you choose to take.


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